EURCHF: Breaks Major Support, Eyes Further Weakness
EURCHF – With the cross breaking and holding below its major support at 1.0000 the past week, risk of further weakness is now expected in the coming week.
EURCHF has been weakening since collapsing off the 1.6826 level in 2007 and with bearish momentum remaining in progress, further declines looks to target the 0.0900 level, its psycho level.
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On a violation of that level, the 0.0800 and 0.0700 levels, all representing its psycho levels will be aimed at. Its weekly and monthly studies are bearish and pointing lower supporting this view.
Alternatively, on any recovery higher, the 1.0000 level just violated will come in as the initial resistance with a breach of there turning attention to the 1.1296 level followed by the 1.1402 level, its July 18’2011 low.
We expect a reversal of roles as resistance to occur at this level and turn the cross back down.
USDCHF: Maintains Long Term Bearish Momentum (Week Ahead)
USDCHF: Continued bearish momentum saw the pair weakening strongly further the past week and increasing the risk of additional weakness in the new week.
USDCHF has been weakening since losing upside momentum at 1.1727 in May’2010 and with that trend still intact, the 0.7700 level and then the 0.7600 level, all representing its psycho levels are now beckoning.
The use of its psycho levels as supports is necessary due to the absence of any visible support. On a violation of the 0.7600 level, its psycho level standing at 0.7500 will come in as the next downside target.
Its weekly and monthly RSI are bearish and pointing lower suggesting further weakness. On any recovery, its July 29’2011 low at 0.7850 will be targeted with a turn above here aiming at its July 13’2011 low at 0.8079.
We expect this level to reverse roles as resistance and turn the pair back down in the direction of its long term downtrend.
Other resistance levels above the 0.8079 level if taken are located at the 0.8274 level, its July 19’2011 high and the 0.8524 level, its July 01’2011 low.
