Forex Trading Alert: USD/CHF Meets Resistance

By: Przemyslaw Radomski & Nadia Simmons | Thu, Dec 18, 2014
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Earlier today, the U.S. Department of Labor showed that the initial jobless claims in the week ending December 12 fell by 6,000 to 289,000 beating analysts' expectations for an increase of 1,000. These bullish numbers supported the greenback and pushed USD/CHF to a fresh 2014 high. Will we see further rally?

In our opinion, the following forex trading positions are justified - summary:

EUR/USD: none
GBP/USD: none
USD/JPY: none
USD/CAD: none
USD/CHF: none
AUD/USD: none


EUR/USD

EUR/USD
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EUR/USD
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The situation in the medium- and short-term has deteriorated as EUR/USD reversed and declined, invalidating the breakout above the resistance zone (created by the 38.2% Fibonacci retracement based on the Oct-Dec decline, the barrier of 1.2500, the Dec high and the 50-day moving average) and the blue declining line. These strong bearish signals in combination with a breakdown below the lower border of the consolidation (marked with blue) suggests that the exchange rate will test the strength of the recent low in the coming day (or days). Please note that this scenario is currently reinforced by sell signals generated by the indicators.

Very short-term outlook: bearish
Short-term outlook: mixed
MT outlook: mixed
LT outlook: bearish

Trading position (short-term): In our opinion, no positions are justified from the risk/reward perspective at the moment. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.


USD/CAD

USD/CAD
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In our last commentary on this currency pair, we wrote:

The first thing that catches the eye on the above chart is a breakout above the upper line of the rising wedge (marked with blue). This is a bullish signal, which suggests that we could see an increase to the 61.8% Fibonacci retracement (around 1.1649). At this point, it's worth noting that slightly above this level is also the Jul 2009 high, which reinforces this area.

As you see on the above chart, the situation developed in line with the above-mentioned scenario as USD/CAD reached our upside target. What's next? Let's examine the daily chart and look for more clues about future moves.

USD/CAD
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Quoting our Friday's Forex Trading Alert:

(...) USD/CAD extended gains and hit a fresh 2014 high, breaking above the upper line of the very short-term rising wedge (market with blue dashed lines). This is a bullish signal, which suggests further improvement to around 1.1603, where the red resistance line (based on the Oct and Nov highs) and the 150% Fibonacci extension are.

From this perspective, we see that currency bulls pushed the exchange rate higher as we expected. Despite this improvement, the above-mentioned resistance area paused further rally, triggering a pullback. With this downswing, the pair declined, invalidating earlier breakout, which is a bearish signal that suggests lower values of the exchange rate (especially when we factor in sell signals generated by the indicators). Nevertheless, we think that further declines will be more likely if USD/CAD breaks below the lower border of the consolidation (marked with blue) at 1.1547.

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective at the moment. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.


USD/CHF

USD/CHF
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USD/CHF
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On Tuesday, we wrote the following:

(...) USD/CHF broke below the lower order of the consolidation (...) which triggered a sharp pullback that took the pair to the (...) long-term red line. Several times in the previous month, this key support line stopped further deterioration, which translated to rebound and a fresh 2014 high. Taking this fact into account and combining it with the current position of the indicators, it seems to us that currency bulls will try to push the exchange rate higher.

Looking at the charts, we see that the situation developed in tune with the above-mentioned scenario. As you see, the long-term red line withstood the selling pressure, which resulted in a sharp corrective upswing that took the exchange rate to the upper line of the rising wedge (marked with brown) and the orange resistance zone (marked on the weekly chart). At the beginning of the month the combination of these levels stopped the rally, triggering a correction. Taking this fact into account, it seems to us that we could see a similar price action in the coming days. If this is the case, we'll see a drop to the lower border of the rising wedge (currently around 0.9739).

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: bearish

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective at the moment. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

 


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Przemyslaw Radomski

Author: Przemyslaw Radomski

Przemyslaw Radomski, CFA
Founder, Editor-in-chief
Gold & Silver Investment & Trading Website - SunshineProfits.com

Przemyslaw Radomski

Przemyslaw Radomski, CFA (PR) is a precious metals investor and analyst who takes advantage of the emotionality on the markets, and invites you to do the same.

His company, Sunshine Profits, publishes analytical software that anyone can use in order to get an accurate and unbiased view on the current situation.

Recognizing that predicting market behavior with 100% accuracy is a problem that may never be solved, PR has changed the world of trading and investing by enabling individuals to get easy access to the level of analysis that was once available only to institutions.

High quality and profitability of analytical tools available at www.SunshineProfits.com are results of time, thorough research and testing on PR's own capital.

PR believes that the greatest potential is currently in the precious metals sector. For that reason it is his main point of interest to help you make the most of that potential.

As a CFA charterholder, Przemyslaw Radomski shares the highest standards for professional excellence and ethics for the ultimate benefit of society.

Sunshine Profits enables anyone to forecast market changes with a level of accuracy that was once only available to closed-door institutions. It provides free trial access to its best investment tools (including lists of best gold stocks and best silver stocks), proprietary gold & silver indicators, buy & sell signals, weekly newsletter, and more. Seeing is believing.

Disclaimer: All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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Nadia Simmons

Author: Nadia Simmons

Nadia Simmons
Sunshine Profits.com
Forex & Oil Trading Strategist
Forex Trading Alerts
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Nadia Simmons

Nadia is a private investor and trader, dealing in currencies, commodities (mainly crude oil), and stocks. Using her background in technical analysis, she spends countless hours identifying market trends, major support and resistance zones, breakouts and failures. In her writing, she presents complex ideas with clarity that enables you to easily understand market changes, and profit on them. Nadia is the person behind Sunshine Profits' 3 premium trading services: Forex Trading Alerts, Oil Trading Alerts Alerts, and Oil Investment Updates.

All essays, research and information found above represent analyses and opinions of Nadia Simmons and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Nadia Simmons and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Nadia Simmons is not a Registered Securities Advisor. By reading Nadia Simmons's reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Nadia Simmons, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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