Technical Analysis – USDCHF touches 2-month high; bullish momentum may be easing
October 18, 2018 11:26 am
USDCHF’s remarkable recovery after touching its lowest since April of 0.9541 on September 21 has brought the pair to a two-month high of 0.9958 earlier on Thursday. The pair has eased a bit from that peak, though it remains roughly 400 pips above late September’s low.
The Tenkan and Kijun-sen lines are positively aligned in support of the short-term bullish bias that is in place. However, notice that the two lines have eased, suggesting that positive momentum may be running out of steam.
Given a move above the previously-tracked high of 0.9958, resistance may occur around the parity level (1.00) that could hold psychological significance. Higher still, 1.0067, a more than one-year peak, would increasingly come into scope.
On the way down, immediate support could be taking place around 0.9925 which was congested between mid-June to late August. Not far below lies the current level of the Tenkan-sen at 0.9903, with a downside violation turning the focus to 0.9859, which is the 23.6% Fibonacci retracement level of the upleg from 0.9187 to 1.0067. The 100-day (simple) moving average line and the Ichimoku cloud top roughly coincide with this point. Steeper losses would turn the attention to the zone around the 50-day MA at 0.9796.
In terms of the medium-term picture, trading activity taking place above both the 50- and 100-day MAs, as well as above the Ichimoku cloud, is indicative of a positive outlook. However, the two MAs being roughly flat at the moment is a sign that the bullish structure remains fragile and further rallies are needed to solidify it.
Overall, the short- and medium-term outlooks are looking mostly bullish, though they both currently appear relatively fragile.
USDCHF’s remarkable recovery after touching its lowest since April of 0.9541 on September 21 has brought the pair to a two-month high of 0.9958 earlier on Thursday. The pair has eased a bit from that peak, though it remains roughly 400 pips above late September’s low.
The Tenkan and Kijun-sen lines are positively aligned in support of the short-term bullish bias that is in place. However, notice that the two lines have eased, suggesting that positive momentum may be running out of steam.
Given a move above the previously-tracked high of 0.9958, resistance may occur around the parity level (1.00) that could hold psychological significance. Higher still, 1.0067, a more than one-year peak, would increasingly come into scope.
On the way down, immediate support could be taking place around 0.9925 which was congested between mid-June to late August. Not far below lies the current level of the Tenkan-sen at 0.9903, with a downside violation turning the focus to 0.9859, which is the 23.6% Fibonacci retracement level of the upleg from 0.9187 to 1.0067. The 100-day (simple) moving average line and the Ichimoku cloud top roughly coincide with this point. Steeper losses would turn the attention to the zone around the 50-day MA at 0.9796.
In terms of the medium-term picture, trading activity taking place above both the 50- and 100-day MAs, as well as above the Ichimoku cloud, is indicative of a positive outlook. However, the two MAs being roughly flat at the moment is a sign that the bullish structure remains fragile and further rallies are needed to solidify it.
Overall, the short- and medium-term outlooks are looking mostly bullish, though they both currently appear relatively fragile.
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