USDCHF Long Term Overview
The last move down of the USDCHF pair was in the magnitude
of what people can call "shock and awe". It is easy to feel an urge
to enter and trying to catch the "falling knife" in such
developments.
For those investors, that think the pair has arrived to the
end of the road down, we show this long term chart (monthly). The following
technical points are telling us that the drop has some more way to go, after a
rebound from the current oversold situation:
1. The depth of the moves down in the prior breakdowns from
previous important support levels is shown here in the black rectangles: 2650,
2280 and 2020 pips. If we set our current goal to 2000, we see that the price
has to arrive to a target between 0.90-0.95.
2. The Fibonacci projections related to the previous descent
from 1.825 to 1.130, give us 0.96 (123.6%) and 0.86 (138.2%) as possible
end-points.
3. The intersections between these Fibonacci numbers and the
lower boundaries of the two current descending channels (violet ellipses), are
our preferred places because of their technical combination.
4. If you look at the RSI (9 month), it is much oversold.
But notice the behavior of the previous drops. It rebounds and crosses back
over 30 but never reaches 50 before going oversold again. All the chances are
that we will see the same action until the price will get to its lowest level.
Conclusion:
The exhaustion type move in the pair is telling us that the
end is near, but it seems that there is one more move down after the relief of
the oversold status. The crossing up of the 20 SMA could be the first sign of
the end of this bear campaign.
ForexManage
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was created with the best known data at the time. The writer and his company
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writer is not a registered consultant of any kind and so the reader should not
see any single part or the whole analysis as an advice for any kind of action
in the financial markets.
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