US dollar vs Swiss franc support breakdown continues strong bearish trend

<p>Price action on USD/CHF (daily chart) as of October 18, 2012, has tentatively broken down below a key support area around the 0.9250 price region, […]</p>

Price action on USD/CHF (daily chart) as of October 18, 2012, has tentatively broken down below a key support area around the 0.9250 price region, potentially confirming a continuation of the entrenched bearish trend that has been in place since the July 0.9970 high.

The resistance trend line that traces the upper border of this bearish trend for the last three months displays at least four touches since inception, with the last touch effectively ending a bullish correction just last week.

Another current bearish indication is that the price is well below both the key 50- and 200-day moving averages, both of which are also currently sloped to the downside. With the tentative confirmation of the bearish trend’s downside continuation, the price could begin moving towards the key 0.9000 area support. To the upside, any significant breakout above the three-month downtrend resistance line could signify a potential end to the current bearish trend.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.