FX.co ★ The USD/CHF technical analysis and trading recommendations for November 04, 2010

4-hour timeframe

Overview:
The buy signal cancelled and new sell signal with the target at 0.9636 formed. The signal is strong and confirmed, since the price is below the Ishimoku Cloud and the Chinkou Span is below the price graph. The current target for the downside motion is the first support level of 0.9680. In case the price fixates below this level then the second support level of 0.9539 will be the next target. If the price strengthens above the Kidjun-Sen, then the current sell signal will weaken. It is recommended to cut short positions if the price fixates below the Kidjun-Sen (0.9830). The Chinkou Span is below the price graph, thus confirming the current sell signal. The Bollinger Bands show the downtrend, as the lines are diverging and directed downside. The MACD is descending, which also indicates the present downwards tendency.

Trading recommendations:
Currently, it is recommended to trade down with the targets at 0.9680 and 0.9539. The stop loss is set above the Kidjun-Sen 0.9830. In case the MACD turns upside the short positions should be cut.

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.