EURCHF - Monthly long-term Overview

Monthly charts show us a steady fall going steeper and steeper, with lows very near of the lower downtrend line, and an impulsive correction almost reaching a 61.8% Fibonacci retracement. October has seen it trading in a very tight range by now, but the narrower trend level hasn’t been breached yet. On weekly time frame, we can appreciate it weaving a series of bearish flags around the line resistance, which if broken would lead us to next level near 1.4350 which is the previous upper line of the downtrend and also a 138.2% extension and pullback from last swing low. However, the bearish atmosphere is showing up on all the CHF pairs and seems to be too strong for a significant reversal, at least not too soon.

On Daily charts, this pair has been consolidating from the beginning of the month where we had a rising wedge that was broken but lacked the momentum to continue upwards and here again the price is religiously following the trend line in a tight sideways move. I would expect a third push down towards the weekly lows at 1.2760/50 and a possible bottom at around 1.2500/1.2470 which is the lower monthly trend line area of support.

Daily assessment on Friday October 15, 2010 – at market’s close.

EURCHF	RES2	RES1	SUP 1	SUP 2	R/R	FORECAST	PRICE ACTION
Monthly	1.6831	1.4396	1.2767	1.2101	1:1.5	Bullish - range	Holding at Level 1 Sup
Weekly	1.5883	1.3862	1.2849	1.2785	1:1.3	Bearish	Touching down-trend UTL w/doji
Daily	1.4592	1.3554	1.3159	1.2767	1:2.1	Bearish	Rising wedge below Level 1 Res