Chart of the Day - 12/10/2008 - EUR/CHF
FX Solutions | Dec 09, 2008 07:00PM ET
12/10/2008 – EUR/CHF – Price action on the key EUR/CHF cross, a daily chart of which is shown, has just reached and slightly retreated from a critical resistance juncture. At the current price region, there is a confluence of resistance factors that present some possible impending trading opportunities. Most importantly, price has just reached a significant downtrend resistance line (in red) that has been in effect since early August. Coupled with that is a prior horizontal support/resistance level in the 1.5650 region (the lower yellow line), where price has reversed several times in the past. Finally, price is also around a 61.8% Fibonacci retracement level (the high-to-low retracement span extending down from the high on 7/31/2008 to the low hit on 10/27/2008). Lending some additional strength to this confluence of resistance are oscillators like the displayed Stochastics, which are starting to point down from extremely overbought territory. Therefore, if there is any subsequent breakout above this strong resistance confluence, price should likely carry some significant momentum, and would meet immediate further resistance in the 1.5800 region, a prior support/resistance level. Any subsequent move down from resistance, as might be expected from a technical perspective, should first target support around the uptrend line (in green), which has been in effect since late October.
James Chen
Chief Technical Strategist
FX Solutions
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(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; downtrend line in red; horizontal support/resistance levels in yellow; Fibonacci retracement levels in grey; 50-period simple moving average in light blue.)
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