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Currency Pick of The Week

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Currency Pick of The Week

Fri, Aug 21 2009, 07:27 GMT
by Dhruv Dayal Gupta

YourForexDirectory.com

Swing away in the green!!!!!

Fri, Aug 21 2009, 05:08:55 GMT

In the recent past, the USD/CHF pair touched the June 2009 low of 1.0590, after hitting the double top of 1.0938 in the month of Jul 2009. The pair has been in a sideways downtrend since last March 2009, currently moving in a wide band of 1.0957 – 1.0590. Due to a fall in the Consumer Price Index, Reuters/ Michigan Consumer Sentiment Index, PPI ex Food & Energy numbers in the US, alongside an increase in the Swiss Trade number, the Greenback took a beating and plunged 2.35% after testing the current month’s high of 1.0883.

On the daily frame, the pair has completed a Three Black Crow candlestick suggesting that bears have the upper hand since last week. Over the last 3 days, the pair fell heavily and is now moving down towards the long term support level of 1.0590.  On the daily outlook, the pair is trading below the Alligator’s mouth. The 14 period stochastic oscillator is signaling oversold suggesting an uptrend.  In the coming week, the Consumer Confidence and Housing Price Index numbers are expected to help the Greenback. From here, the next resistance levels are 1.0771 & 1.0885 (which is also the 23.6% Fibonacci projection level) and strong support levels are 1.0590 & 1.0525.

On the daily outlook, the ADX indicator is also following suit, supporting the contention of a bullish move in the coming week. Swing traders can take advantage of this downtrend and accumulate or make fresh longs targeting 1.0771(1st target) and 1.0885 (2nd target) with a tight stop loss at 1.0525.

Published on  Fri, Aug 21 2009, 07:29 GMT