Double Bottom in USDCHF?
With each new sell-off coming on less and less momentum, and with the December low now holding, the inevitable question is do we have a double bottom in USDCHF? It certainly is a possibility. And all the more attractive given the short-term trend is now higher on the daily chart. There is still one bit of structure in the way however from stopping this pair from challenging the January high and that is an impressive bear trendline – see chart below. Should this market retrace lower, before mounting a challenge to that trendline, we would look for potential support at the Weekly Central Pivot at approx 94.90.
USDCHF certainly has my attention on an intraday basis given price is above its weekly directional line – in white – and the current daily and 240-minute trends are higher. No doubt USDCHF has been taking strength from the recent up-tick in long rates as seen in U.S. Treasuries, and a continuation of that run could point to a move on the current monthly directional line just above 1.0050, in maroon.
And if USDCHF fails ot penetrate that bear trendline and slumps back in line with it’s intermediate and long-term down-trend…then it’s back to working AUDUSD on the upside.
To attend a live, interactive tutorial given by Jay on determining market direction on Wednesday, 2-9-11, go to: Overview of Directional Lines
Jay Norris is the Chief Market Strategist at Clovernest Financial Group and the author of Mastering the Currency Market, McGraw-Hill, 2009. Jay’s second book Mastering Trade Selection and Management, McGraw-Hill 2011, will be in book stores this Spring.
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Any charts shown here represent market conditions at a particular point in time. Such conditions may not be replicated in the future. Past performance is not indicative of future results.
