FX.co ★ Technical analysis and trading recommendations for USD/CHF for 2010/07/13

4-hour timeframe

Overview:
The downward trend seems to be ended. The sale signal is canceled, a purchase signal formed instead. However, it has developed in the flat and for this reason it does not determine a target. The ‘buy’ signal is very weak yet and is not confirmed. At the same time, Bollinger bands signal about a sideways motion. Therefore, trading is not recommended before the bands start to diverge. In case of the beginning of Bollinger bands diverging upwards, the target will be the second resistance level of 1.0772. If the bands start to diverge downwards, the target will be the level of 1.0386. Bollinger bands show a sideways (!!!) movement – the bands are not diverging and directed sideways, which indicates flat. MACD is increasing, which means the current correction.
Trading recommendations:
In the existing circumstances, it is better to wait for the beginning of a trend movement as we see the evident flat on the market.
Except the technical picture, the fundamental reports and time of their release should be considered also.
The chart annotation:
Ishimoku indicator:
Tenkan-sen — red line
Kijun-sen — blue line
Senkou Span A — light brown stipple line
Senkou Span B — light purple stipple line
Chinkou Span — green line
Bollinger Bands indicator:
3 yellow lines
MACD indicator:
The red line and the histogram with the white bars in the indicators window.