Technical analysis – USDCHF 4-hourly chart shows downtrend and new lows for USD
October 24, 2013 8:21 am
The Swiss franc is sometimes used as a proxy for the euro, although some traders prefer it as it is a traditionally a more defensive currency and benefits when risk appetite is negative.
It appears from the 4-hourly chart that the US dollar is in a steep downtrend against the franc, trading at levels which represent 2-year lows.
The uptrend in the USD that was in place during the first half of October broke down with the big downside move of October 17, which took out the October 14th low of 0.9060.
A new downtrend can be formed from the highs of October 16th and October 22nd. This downtrend would be challenged if the 0.8965 level is breached, while an even stronger resistance area would be around 0.9045.
The 50-period moving average is also close to that level at 0.9041.
One cautionary note regarding USD shorts is that the RSI is currently under 30, at 27, which indicates oversold market conditions. This in turn indicates that the USD could stage a relief rally from its lows.
Such a rally however would probably be short-lived and likely to run into resistance soon given the weak technical picture of the greenback.
The Swiss franc is sometimes used as a proxy for the euro, although some traders prefer it as it is a traditionally a more defensive currency and benefits when risk appetite is negative.
It appears from the 4-hourly chart that the US dollar is in a steep downtrend against the franc, trading at levels which represent 2-year lows.
The uptrend in the USD that was in place during the first half of October broke down with the big downside move of October 17, which took out the October 14th low of 0.9060.
A new downtrend can be formed from the highs of October 16th and October 22nd. This downtrend would be challenged if the 0.8965 level is breached, while an even stronger resistance area would be around 0.9045.
The 50-period moving average is also close to that level at 0.9041.
One cautionary note regarding USD shorts is that the RSI is currently under 30, at 27, which indicates oversold market conditions. This in turn indicates that the USD could stage a relief rally from its lows.
Such a rally however would probably be short-lived and likely to run into resistance soon given the weak technical picture of the greenback.
Related Posts: