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USDCHF Breaks Early Month Range - Focus on 9400

USDCHF Breaks Early Month Range - Focus on 9400

Jamie Saettele, CMT, Sr. Technical Strategist

FXCM Expo Videos (Innovative Tech. explains Key Reversals and RSI Signals)

Innovative Techniques with Traditional Technical Indicators

Trading with the Elliott Wave Principle

Seeing the Forest from the Trees: An Analysis of Global Markets

Afternoon Technicals (all charts)

Other TA (crosses, COT, etc.)

January Key Reversals-none

December RSI Signals-CADCHF (bearish)

Key Reversals Last Week-none

RSI Signals Last Week-CADJPY (bearish) GBPCHF USDCHF (bullish)

Daily Key Reversals (RV) and RSI Signals (RS)

Morning Comments:

US Indices – Are off of their best levels but little has changed following Friday’s NFP rally, when S&P futures traded at their highest level since the July high and Dow futures their highest level since December 2007! The divergence between the 2 futures contracts (Dow above 2011 high and S&P below) is however consistent with reversal conditions.

USDOLLAR (Ticker: USDOLLAR): Hast tested and held the 61.8% retracement of the rally from the October low and series of November lows from 9665 to 9690. Remember, the probability of a reversal increases with the beginning of a new month. Pattern is constructive above last week’s low (9687). Recent pivots are now resistance at 9790 and 9835.

USDCHF_Breaks_Early_Month_Range_-_Focus_on_9400_body_usdollar.png, USDCHF Breaks Early Month Range - Focus on 9400

Prepared by Jamie Saettele, CMT

EURUSD – Is nearing the 2/1 low at 13025. A drop below would trigger a short term bearish bias towards 12875. Resistance for today is 13080-13100.

GBPUSD – The February range thus far consists of the first day of the month. As such, a break of the 2/1 range (15882-15706) will trigger a directional bias. Downside levels of interest are 15635 and 15580. Upside levels of interest are 15945 and 16000.

AUDUSD – Is trading right at the September and October highs. Again, the first day of the month range (10740-10568) is critical to the larger trend. The next upside level of interest is late July support at 10900 and a drop under 10568 is needed in order to trigger a bearish bias. 10640/70 is near term support.

NZDUSD – Daily RSI is above 78! This is extremely rare and the most recent instances of RSI > 78 are 4/15/11 and then 7/23/07 and 7/24/07. In 2011, the NZDUSD fell 180 pips over the next 2 days before continuing its advance. The top in July 2007 led to a drop of nearly 1500 pips in 1 month. The NZDUSD has also advanced for 7 consecutive weeks. This has only occurred 7 times since 2002. The NZDUSD declined an average of 56 pips the next week.

USDCHF – Has broken through the range top at 9250 which shifts focus to former support at 9400 (also the 61.8% retracement of the decline from the January high). 9300 and 9250 are interim resistance. Favor the upside against 9110.

--- Written by Jamie Saettele, CMT, Senior Technical Strategist for

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Jamie is the author of Sentiment in the Forex Market.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.