USD/CHF remains bounded in tight range today. Rebound from 1.2198 was limited at 1.2277 and lacks momentum to go further yet. As discussed before, it will take a break above 1.2306 resistance to confirm rebound from 1.1993 has resumed for 61.8% retracement of 1.2571 to 1.1993 at 1.2350. Otherwise, further retreat could still be seen towards 1.2124 cluster support (61.8% retracement of 1.1993 to 1.2331 at 1.2122).
In the bigger picture, previous break of 1.2282 cluster resistance (50% retracement of 1.2571 to 1.1993 at 1.2282) confirms that fall from 1.2571 has already completed at 1.1993 with bullish convergence condition in daily MACD and RSI. More importantly, this will increase the chance that USD/CHF is about to complete a medium term head and shoulder bottom formation (ls: 1.1919, h: 1.1878, rs: 1.1993). Sustained break of 61.8% retracement at 1.2350 and neckline resistance (1.2768 to 1.2571, now at 1.2347) will add more weight to this case. Stronger rally should then be seen to 1.2571 first and then 1.2768.
However, below 1.2124 cluster support (61.8% retracement of 1.1993 to 1.2331 at 1.2122) will indicate that rebound from 1.1993 has possible completed and save the case that recent choppy price actions could merely be part of a medium term triangle consolidation. And, down trend from 1.3283 should still resume after completing such consolidation in such case.
Thursday, May 31, 2007
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