EUR/CHF
FX Solutions | May 22, 2008 08:00PM ET
EUR/CHF – Bearish price-oscillator divergence on the EUR/CHF daily chart, as shown, helped to presage the downturn in the pair that began early in the week. This divergence is outlined by the two short magenta lines, where price made a higher high while the MACD Histogram made a lower high. This downturn occurred at a significant location with respect to support/resistance, as the point at which the reversal took place was at a significant dynamic resistance level in relation to both the red downtrend resistance line (marked “A”) as well as the green uptrend resistance line (marked “B”). Currently, price has broken down below the short-term uptrend support line (marked “C”) in the past couple of days. In the event of continued momentum to the downside, the next major support resides around the long-term uptrend support/resistance line (marked “D”). This support is also in the region of a key 38.2% Fibonacci retracement level.
James Chen
Chief Technical Analyst, FX Solutions
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