Last Updated on 27 November 2012
Mohammed Isah
USDCHF- Turns Lower On Price Failure, Further Weakness Likely.
USDCHF: With USDCHF reversing almost all of its recovery gains the past week, further decline cannot be ruled out in the new week. In such a case, the pair should push further lower towards the 0.9213 level where a violation will call for a run at 0.91.50 level followed by the 0.9041 level. Its daily RSI is bearish and pointing lower supporting this view. On the other hand, the pair will have to break and hold above the 0.9511 level, its Nov 2012 high to reverse its present bear threats. This if seen will create scope for more recovery higher towards the 0.9550 level. A breach of here will open the door for more upside offensive towards the 0.9606 level. On the whole, the pair remains biased to the downside having ended its correction.
EURUSD: Takes Out Key Support, Eyes More Weakness.
EURUSD: The pair has broken and held below its key support at the 1.2822 level. You will recall we have been watching that level for a long time. We see two things happening. One, EUR will have to hold below this support to validate its break and second, a failure to hold below here could mean further upside offensive could follow. If the former plays out, expect further declines towards the 1.2755 level. We expect a cap to occur here and possibly turn the pair higher again. But if broken, expect further declines to develop towards the 1.2625 level. Its daily RSI is supportive of this view. On the upside, resistance resides at the 1.2822 level where a reversal of roles could occur. However, if this fails, further upside should build up towards the 1.3000 followed by the 1.3171 level. A breach of here will resume its broader uptrend towards the 1.3282 level with a cut through here calling for a move further higher towards its weekly ema at 1.3415 level. All in all, EUR faces further downside threats.
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