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USDCHF Technicals: 1/30

by on January 30, 2014 5:33 pm GMT
 

The dollar has surged above 81 as solid data, combined with another $10 billion taper from the Federal Reserve, as increased sentiment for the greenback. The USDCHF has become a high correlation proxy for the US dollar index, so this can give forex traders an insight to where the dollar may go.

The 4H chart shows USDCHF trending within a triangle after bouncing off an asymmetrical double bottom. Price action was rejected at .9050, but it remains above all major exponential moving averages. These will provide dynamic support, while price action support can be found at .9010/00. Topside potential could be limited to .9055, where the downward trend line extends from the 30-day 4H high.

Momentum still remains strong with price action near the top of the range. A pullback will prevent itself with the +DMI and/or the ADX begin to tick down. A break above the price action resistance and trend line could provide momentum to challenge .9100.

4H Chart of USDCHF

4H Chart of USDCHF

Price action still remains above the daily downtrend from just above .97, and the 72 and 50 EMA will provide support along with the ascending trend line made from the .8799 low.

.9100 looks to be the nearest price action resistance, while the 200 EMA will provide further caps at .9157. The +/- DMIs have sharply reversed and could signal a trend reversal. Look for a convergence for increased momentum.

1D Chart of USDCHF

1D Chart of USDCHF