FX.co ★ USDCHF technical analysis for August 22, 2011

No significant news or indices are expected to be released today. That is why I will analyze the situation from the technical point of view. The Swiss franc, which is considered to be more stable than other currencies, got corrected by over 800 points during previous weeks. It is quite logical that such correction will inevitably be followed by getting back to basic movement, taking into account some fundamental indicators. Briefly speaking, the latest news from the USA was rather unstable – there are no single economic trends that would point to the current economic circumstances. In Switzerland the situation has been rather calm and stable. Fundamentally, only selling the dollar against franc makes sense now.
But we’d better return to technical analysis. From the technical point of view, the price is now extremely high. It is proven by such indicators as Stochastic oscillator and CCI. Both indicators are now moving from being overbought to the neutral territory – there is a signal to open short positions. The Stochastic indicator of standard deviation is suggestive of less deviation from the linear regression. Yet the values of this indicator are still rather big.
In general, now it is time to go short. The mid-term aim is absolute low. Stop loss should be placed after the local high of last week.