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Technical Analysis:  USDCHF Breaks 0.9560 14 Day Moving Average Support Line

Posted by Chris Advincula on Apr 6, 2016 1:43:29 PM

Tech.CHF.4.6.2016.jpg

(April 6 Wed) The 8-hour chart displays a downward channel. The top line descends starting from 1.0000 (Feb 8) to 0.9620 - which is the intraday high and resistance level today. The bottom channnel line starts from 0.9650 to 0.9525 which also happens to be the intraday low today. (see the 5-minute chart)The 14, 30 and 60 day moving averages all show a convergence of resistance formation at 0.9950 on Feb 5 and 0.9925 on Jan 27 respectively. The most recent 14 DMA line fell from 0.9750 to 0.9680 on the 8-hour chart.

While this may show a potential bearish direction, the 14 day relative strenght index by contrast shows a potential rebound and overbought level at 30, which was attempted 3 times from Feb 16 to the present. An overbought level of the spot equivalent of 0.9560 which is the 14 day moving average support today as shown on the 5-minute chart. The rebound took place indeed to reach the intraday high today at 0.9620, while the 14 DMA not far behind at 0.9605.

On the 5-minute chart, the 14 DMA broke the 0.9560 support and is currently at 0.9550 and slowly inching its way lower to the 0.9500.  Expect another short covering rebound to the 0.9600-0.9625 resistance before it proceeds lower. Watch out for the Swiss National Bank intervention buying the USDCHF if it breaks 0.9500 and enters the 0.9400 territory.

USDCHF.4.6.2016.jpg

Topics: USDCHF, swiss national bank, Swiss franc, Forex Market, technical analysis

 

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