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USD/CHF - Nearing Short-Term Bullish Exhaustion?
Posted on March 4, 2009 at 13:24 in Analysis by James Chen

USD/CHF Daily ChartAs shown on the accompanying USD/CHF 4-hour chart, price has been entrenched in a gradual parallel uptrend channel since around late January. More recently, since late February, price has been rising steeply within this channel in a rising wedge formation. After hitting the top of the wedge, price has just turned down. Momentum oscillators are displaying a turn down from severely overbought. Could this signal a short-term exhaustion of the recent bullishness. A breakdown below the wedge would lend strength to this view. If this occurs, further clear support resides around the bottom of the parallel uptrend channel. Conversely, any break above the wedge should target resistance around the top of the channel.

5 Responses to “USD/CHF - Nearing Short-Term Bullish Exhaustion?”

  1. on 04 Mar 2009 at 2:54 pm1mervin matsumoto

    So, what would be your preference? Short @1800-50 or buy @1530-50? Or both perhaps.

  2. on 04 Mar 2009 at 5:19 pm2James Chen

    Hi Mervin,

    Thanks for your question. On a near-term basis, I’m leaning towards bearish and looking for a significant breakdown below the bottom border of the wedge as a potential bearish signal, targeting the bottom of the parallel uptrend channel. In the opposite direction, a break above the top border of the wedge could potentially be bullish, targeting the top of the channel. Thanks, Mervin.

    James Chen

  3. on 04 Mar 2009 at 8:46 pm3Tim Cameron

    James, wrong spot for a wedge in wave action, but overall, I agree with you..this is corrective and I am ready to sell on the break of the lower trendline…the wedge pattern was the price action prior to the last impulsive fall….price often retraces the entire wedge which began at 113…that is my initial target should the lower trendline break…Tim

  4. on 04 Mar 2009 at 8:49 pm4Tim Cameron

    sorry for the 2nd post, but if you move your Large degree lower trendline up to the bottom crated before the last major drop a few days ago, you will see it is working as resistance now for this corrective move you are showing as a wedge…….

  5. on 05 Mar 2009 at 2:09 pm5James Chen

    Hi Tim,

    Thanks for your insights!

    James Chen

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