Forex: USD/CHF in unheralded 80-pip drop

on Aug 2, 2013
Listen Friday August 2nd_: The USD/CHF yesterday closed at 0.9260, right above the flat 200-day simple moving average, currently residing at 0.9361,for a gain on the day of 1.04 percent. During the day the downwards wedge pattern was broken to the upside.

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Yesterday’s rise was helped by the MACD (9,12,1) convergence on the 4H chart. The rise was limited by the descending 89-period simple moving average also on the 4H scale.
The pair had today been trading sluggishly, in a 30-pip range and slightly above the MA89, until just a short time ago when that line was breached with the price falling from 0.9380 to test the 0.9300 level. Currently the pair is changing hands at 0.9325, right at the 200-hour simple moving average. The price may well decrease further, testing the upper line of the wedge pattern.

The sudden fall can be attributed to the inability of the bulls to push the price through the 0.9378 resistance level and then hold it above. This level has been a good entry point for the bears but if the 0.9320 minor support holds, the pair will be rising again in a next attempt to break through 0.9378.
Upwards the primary target medium term would be the 9 July high of 0.9750.


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CHF Forex