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(Please click on the accompanying chart to enlarge.)
After breaking down below the steep uptrend support line earlier in the week, price on the USD/CHF daily chart (as shown) broke another support level on Wednesday (click here for details). As of Wednesday morning (New York session), price has further declined to approach and bounce off of a key psychological level around 1.0900. A continued upward move off this bounce should meet resistance around the 1.1050 support/resistance level that price broke down on Wednesday. If there is a subsequent break below the 1.0900 psychological level, on the other hand, the next immediate support to the downside resides around the strong 1.0850 horizontal price level, followed by the equally strong 1.0730 level.
UPDATE: As of Thursday late afternoon (New York session) price has tentatively broken back up above the 1.1050 support/resistance level. The technical bias, however, is still generally bearish as of this writing.
- 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