The FX Trader’s view – Earlier this year, following a clear break lower, it looked as though bears in the EUR/CHF cross rate were running out of steam. However, a second wind saw a fresh move south which does, in fact, look like a blow-off move, with recovery prospects improved.
- WEEKLY CHART:
The latest slip back saw a breach of the 1.4296 Oct-09 low, but it is proving a struggle to hold below this.
A lower Fibo projection at 1.4040 stays out of reach for now.
Note the recent type of ‘doji’ week on this candlestick chart, a week of apparent indecision with open and close near the same level. - DAILY CHART:
In the Commodity Specialist Guide we had previously suggested that a final, blow-off bear move was being seen.
At this stage, though, the recovery to the 23.6% level of the whole Mar-09/Apr-10 decline now needs to be followed by a break/close above, in order to suggest a better rebound phase is underway.
Then note next target around the 1.4640 38.2% level, which interestingly is near last month’s breakdown point (probably no coincidence, given the underlying Fibonacci forces at work – for that matter note how the Dec-09 break point corresponds with 76.4%).
Along the way resistance from the 1.4559/76 prior lows area could have some effect.
In case of s/term pullback keep in mind the support point around the 1.4229 24-Mar low.
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