FX.co ★ Technical analysis and trading recommendations for USD/CHF for July 26, 2010

4-hour timeframe

Overview:
The sideways motion keeps on. A ‘sell’ signal has formed, but now signals from Ishimoku can be ignored, as there is well-defined flat on the market. And although Bollinger bands have started to diverge slightly, still with a high probability the sideways movement is to continue because the price has not overcome the limits of the sideways channel. Therefore, before another start of Bollinger bands diverging trading is not recommended. In case of the beginning of Bollinger bands diverging upwards a target will be the first resistance level of 1.0636. If Bollinger bands start to diverge downwards, a target will be the level of 1.0380 (and further to 1.0252). Bollinger bands show a sideways (!!!) movement – the bands are diverging and directed sideways that testifies to flat for a while. MACD has started increasing, however, as we have already said, the price has not left the limits of the earlier marked channel, therefore, flat is continuing now.
Trading recommendations:
In these circumstances, trading is not advisable as there is evident flat on the market. Waiting for a trend beginning is recommended.
Apart from the technical picture, it is important to consider the fundamental reports and time of their release.
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.