USD / SWISS FRANC ANALYSIS and FORECAST

USD/CHF reached a logical downside target of 1.0032, and that was within last month’s second level of support at S2 (S1 on the current chart).

It also appears that since July 31st to the present time there has been a move of five waves, indicating that either a relatively strong corrective rally is due, or that a mid-term low is firmly in place.

At time of writing a few days of bullish activity have occurred, but a close above the recent high of 1.0337 and more importantly above the October high of 1.0452, must happen before we can anticipate a more serious rally.

The Stochastic indicator suggests that a minor cycle high is in place, so at least some days of downward correction will not be a surprise. Any drop below the October 23rd low of 1.0032 would negate bullish probabilities for the near term.


Daily USD/CHF chart as at 4 November 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS
MACD – rising strongly, and with bullish divergence.
Stochastic – turning down from around the 80 evel.
SMA200- sloping downwards, far above the current price, at 1.0814.
EMA20- rising from below the market.

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.