14, February 2013

USD/CHF (a 4 hour chart)

USD/CHF (a 4 hour chart)

General overview 

Analyzing the USD/CHF rate on the Forex market on February 14, we can see that the upward movement continues, Bollinger Bands shows the lateral movement, the price consolidates above the Ichimoku cloud and we have a confirmed "Golden Cross."

The current sell signal is confirmed and strong as the Chinkou Span is above the price chart and the price is above the Ichimoku cloud. For the current moment the goal of an upward movement is the first resistance level at 0.9218. If the price fixes above that target an upward movement will continue with the next goal which is the second resistance level at 0,9270. The upward movement will be actual as long as the price is above the Kidjun-sen (0.9179), if the price consolidates below this line the sell signal will be weakened and questioned as well. Thus a downward movement to the level at 0.9085 can be started.

The Chinkou Span is located above the price chart confirming the current signal to buy and indicating the bullish mood at the market.

Bollinger Bands are directed horizontally, so now it is recommended to stay out of the market until we get the confirmed signal.

MACD is directed upwards indicating the current upward movement. Rebound from the level at 0.9171 may provoke a downward correction.

Trading recommendations

On the USD/CHF market we recommend to consider long positions with first target seen at the 0.9218. If the price consolidates above the first target buy deals can be continued to 0.9270. Stop loss we place below 0.9135 and if this line moves up we can move the stop-loss after it.

It is recommended to close manually long positions when MACD reverses to the downside. When we take profit of 50 - 60 points stop loss can be placed to a non-loss area. Take-profit can be set slightly above the target levels at 0.9225 and 0.9280.

Apart from the technical picture it is necessary to consider the fundamental data and the time of its release.

In case front-running deals are possible, you can take a smaller timeframe (M15-M30) and follow the reversal of the trend indicator (Heiken-Ashi, for example) near the price level where the price reversal will probably take place.