2016/08/04 — Technical Analysis — Market Trends and Oscillators USD/CHF
By Kian Lavasani, Market Analyst, MultiBank Exchange Group
The USD/CHF pair has held strong since the 2nd of August, oscillating between a range of 0.9645–0.9762 favoring an upside formation. August 3rd revealed some bullish support but soon after leveling off with clear indecision by the market with our candlestick bodies barely taking on any bulk. With our beginning and close prices barely moving let’s take a look at some of our tools to see if we can spot any future trends.
The Swiss Franc has lost some ground this past month against our strong blooded greenback. Like clockwork we can see that the price is being held within range of our Bollinger bands, bouncing off .97370 and slowly returning to our center band. This behavior indicates that we can expect ranging behavior to continue on for the time being. Our Stochastic oscillator gives warning that the price could aggressively drop with a bearish reversal since we are now reading over the 80 level, keep close watch on this oscillator for the following few days to see how this plays out. Reviewing our ADX lines reveals that our current ranging trend will hold strong, so don’t expect a drastic change here. If you look at the past data for the month you can see that the strength of the previous trend has dropped, perhaps indicating we are falling out of our current trend and entering a new reversal. The MACD lines are running parallel for the past few periods indicating that our current trend will hold steady for a period of time, the lack of activity here suggests an indecisive market. Our standard deviation line has run fairly low and after the recent jump around July 29th we can no see a steady rise; this could follow into a breakout trend so keep a watch for any significant change. Following next to our Parabolic SAR dots, they currently support a bullish position, however the distance between our closing price and parabolic dots is closing so expect buying power to diminish following several more periods.
Examining our IKH indicators we can see a berth of opportunity. First looking at our blue line (Kijun Sen), we can see that there was a recent resistance break, supporting the idea that the bullish opposition is gaining ground and will continue to build over the next few periods and hopefully hold as a strong support level. Our red line (Tenkan Sen) is steadily rising approaching our current price level, this indicates that a trend will begin to form and break our little ranging bubble that has formed over the last few periods. Our green line (Chikou Span) has just entered a bottom-up cross over the price screaming to us that it’s time to buy and ride the coming up-trend, this gives confidence to our other analysis as well. Our last indicator the Senkou Span, shown above as the two orange lines and shaded range, is showing two resistance levels. However, we can clearly see the price is approaching the bottom line, given our other analysis it’s probable this level will be broken and become a support level thereafter. We’ll take another look at this next week and see where the price has moved.
A fair synopsis of our analyses puts us at a possible break out for a bullish overhaul and uptrend. We do have one contrasting indicator, the Stochastic line casting a shadow of doubt showing that the market may be overbought. With this in mind, intraday traders will need to watch keenly for lagging indicators confirming an uptrend in our next few periods before jumping in full throttle.
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