FX.co ★ The USD/CHF technical analysis and trading recommendations for October 13, 2010

4-hour timeframe

Overview:
The downward movement with new sell signal continues. The Bollinger bands started to diverge again, thus pointing to the downside movement. In this case, the next target for the downtrend is the first support level of 0.9525. In whole, the signal is strong and confirmed, as the price is below the Ishimoku cloud and the Chinkou Span is below the price curve. The downside movement is more preferable now. In case of the rebound the side movement or correction can start. If the price breaks through this support level, then we will have the next target for the downward movement to 0.9424. In case the price is above the Kijun-Sen (0.9635), the sell signal will weaken and it is recommended to cut short positions. The Chinkou Span is below the price chart, thus indicating the bearish sentiment. The Bollinger Bands show the downtrend, lines are diverging and directed down. The MACD is descending denoting the downward tendency.

Trading recommendations:
Currently, it is recommended to trade short with the target to 0.9525. Stop-loss is set above 0.9635.

In addition to technical image one should take into account the fundamental data and the 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.