As I wrote on Friday, USDCHF has two key prices to watch—.9300 on the downside and .9784, January's high. Last week the pair barely managed to stay above that .9300 low. So far this morning the Swissy has rallied to .9598. The .618 of last week's move down is .9610 so one would want to monitor price behavior and momentum here.
On the weekly chart, the fall from the large triangle still weighs heavily on this pair and it's not unreasonable to argue for lows down to .9000 and possibly lower. However, the declining wedge is interesting on the chart as prices are most likely to break upward from here since the steepest angle is the least sustainable. Note, though, that the lower boundary for the wedge is around .9250. There's also bullish divergence from RSI although lots of divergence is around these days.
I'm long from last week but I'm taking some profits. Still the pair is worth monitoring and if it can close over .9784, then huah as they say. If one then argued that on the weekly chart this is an ABC correction within a larger downward move, it's possible the pair could correct to 1.0280 or more.
Here's the weekly chart:
© Dianne Fecteau, 2011. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Monday, February 7, 2011
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