20 February 2012 at 7:12 GMT
USDCHF – Dollar buyers held the upper hand last week, but gains were not sustained and the market registered a small net gain on the week. Failure to attract follow through buying is in line with the pattern which has seen four of the past six weeks post losses. In addition, the bear trend from 1.1733 to 0.7064 between June 2010 and April 2011 is intact, as buyers were unable to convincingly regain 0.9392 50 - the 50 percent correction level in January.
In view of this our call is bearish below 0.9264. The immediate profit target is 0.9155, last Wednesday’s low. Losses beneath here would generate additional selling to 0.9089, the February 9 base and then towards 0.9000.
Risk to this call is a break back above 0.9264, the February 6 high. Gains above here would indicate that bullish sentiment is stronger than initially assessed and generate additional buying to 0.9302, last week’s high and then towards 0.9392, the 50 percent correction of the 2010 to 2011 fall.
