05, February 2013

USD/CHF (a 4 hour chart)

USD/CHF (a 4 hour chart)

General overview

CHF Ichimoku chart is showing a sell signal. The pair continues to develop a bearish trend, still we are in the middle of a correction that started last Friday. A short-term correction goal is a pivot-level – 0.9152.

The current sell signal is confirmed and strong as Chinkou Span is below the price chart and the price is below the Ichimoku cloud. The first target for the downtrend is a support level 0.9020. Should the price overcome this level it will go for the next one which is the second support level – 0.8965. The downward movement will have force as long as the price is below the Kijun-sen (0.9123). If the price consolidates above this line that could change the whole situation. The sell signal may become weak or be canceled at all. In this case we expect the price to start moving towards the upper boundary of the Ichimoku cloud.

The Chinkou Span is below the price chart that just confirms a bearish pattern.

Bollinger Bands shows a continued downward its lines are narrowed. The bearish trend is strong so we suggest going short at this moment.

MACD is going up and indicates an upward trend. Should the indicator turn down that will be a signal for a trend change. If the price kickbacks from the level 0.9152 that fact can return a downward movement.

Trading recommendations

We recommend considering short positions with the first target – 0.8968. The first target is the level – 0.8859. You can place stop loss above 0.9152 and take it down as the price moves.

It is recommended to place stop loss below 91.65 and with the growth of the line to move it up. When you gain 40-50 points of profit you can close an order or place a stop-loss in a breakeven zone.