RE: [OpenFX] USD/CHF

Hi Dan,

Just catching-up!

Okay, the swissy is at extremes on the COT, along with the euro. This setup generally presages a turnaround. MACD divergence looks like it's setting-up, but there hasn't been a confirmation in this timeframe. I do count 5 waves (Elliott) down on the daily and is currently at a 1.272 Fibonacci extension from the swing low on Feb. 1 the high on Feb. 11, which is often a key reversal level. With this in mind, however, note that price closed just off its lows on Friday, near support, and the daily candle is more bearish than bullish--i.e, it's not a two-candle reversal signal, as with an engulfing or tweezers.

The 4-hour shows somewhat of a rectangle consolidation, though not a perfect example. With MACD's pullback to the 0-line after a large run south starting in early-February, this suggests we may see one more push down below the current lows and completed with MACD divergence (like the Daily chart illustrates).

Stepping to the 60M, the pullback from the last move up has price at a .786 Fibonacci retracement--a key level in this timeframe.

Overall, depending on your trading timeframe and risk tolerance, I'd what these lows carefully. Based on what I see, I believe the franc, is setting-up for a turn. Longer-term (i.e., position) traders may want to start legging-in to their positions, while shorter-term traders might wait and look to enter with tighter stops. As I mentioned above, Friday's daily, candle pattern wasn't a reversal. So, even in the longer term, waiting may prove prudent.

My $02. Hope it's useful.

Cheers,

Clay

-------- Original Message --------
Subject: [OpenFX] USD/CHF
From: "forexman05" <forexman05@yahoo.com>
Date: Sat, March 05, 2011 9:55 am
To: OpenFX@yahoogroups.com

Hello everyone! I was curious what the collective thoughts are on this pair. I noticed that the COT commercials have recently added to their shorts, this short term buying of francs seems to be tied to the middle east turmoil. Finally, one could make a case for an inverted head and shoulders pattern forming on a 4 hr chart as well as MACD divergence on the daily (see attached USDCHF daily.gif in the attachments area). I would welcome some feedback, thoughts on this. I am looking at shorting the futures here!

Daniel