Possible Head And Shoulders Bottom In USD/CHF
Marc Chandler | Oct 13, 2013 12:33AM ET
Earlier this week, we identified and possible head and shoulders reversal pattern in sterling. Here we show a Great Graphic of possible head and shoulders bottom of the dollar against the Swiss franc, drawn on Bloomberg.
It may not be as clear as the reversal pattern in sterling. It is also not confirmed, as sterling's was, with bearish divergence in the RSIs. However, the MACDs have crossed to the upside.
As we noted with the head and shoulders pattern with sterling, it is common after the neckline is violated to come back and test the neckline again,.
The early dollar slippage effective accomplished this with the Swiss franc and, as you can see, the dollar recovered. We also note that that 5-day moving average is posited to cross above the 20-day average early next week. The minimum measuring objective for the head and shoulders pattern is near CHF0.9200, which roughly corresponds with a 50% retracement of the dollar's decline from the CHF0.9455 area in early September. The 61.8% retracement is found near CHF0.9270.
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