USDCHF | Bullish Retracement | June 20, 2011
(Chart key: price on 1st pane, Stochastics on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average in orange; 100-period simple moving average in brown; 200-period simple moving average in dark blue; Fibonacci levels in magenta.)
USD/CHF (daily chart) as of Monday (6/20/2011) has completed yet another bullish retracement within the context of a steep bearish trend that has been in place for over a year, since the June 2010 1.1730 area high. This retracement brought price action back up to the key 0.8550 resistance (prior support) before turning back down.
Prior to this bullish retracement, price had reached its downside target around 0.8325 (the new all-time low), which represented the 161.8% Fibonacci extension of the last bullish retracement that occurred in the first half of May. In the event of a breakdown below that all-time low, which would confirm a downtrend continuation, bearish price momentum could potentially begin targeting key psychological support around the 0.8000 round number.
To the upside, the noted 0.8550 level should continue to serve as resistance within the context of the current long-standing bearish trend.
