Technical Trading Tips and Techniques by 
(Please click on the accompanying chart to enlarge.)
As noted on yesterday’s USD/CHF video below, the bearish technicals on the 4-hour chart, as shown to the left, were indicating that upward momentum had perhaps waned, and that a turn back down might be impending. These technical indications included a rejection yesterday near a significant horizontal resistance line around 1.0530, and clear bearish divergence on Stochastics. This morning, price indeed moved down to around the 23.6% Fibonacci retracement level as of this writing. If there is any further momentum to the downside, clear support resides around the 1.0330 region, which coincides with the 38.2% Fibonacci retracement level.
Mid-Morning (NY Session) Update: As of this writing, price has retraced most of the downward move from earlier this morning. The 1.0530 region should continue to act as resistance to the upside.
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading (John Wiley & Sons), will be released in early 2009.