The Week Ahead On USDCHF

USDCHF – Extends Corrective Recovery

USDCHF: The pair managed to close higher for a second week in a row at the end of the week, suggesting we could see further correction. If this occurs, further upside risk could build up towards its Sept 10'2012 high at 0.9482 where a breach will open up further upside gain towards the 0.9606 level. Its weekly RSI has turned higher suggesting further strength. On the down, if its current recovery fails especially ahead of the 0.9421/82 levels, its short term downtrend could be triggered. Support lies at the 92.38 level where a violation will aim at the 0.9193 level, its May 07’2012 low followed by the 0.9100 level. A breach of here will turn focus to its major psycho level at the 0.9000 level. On the whole, the pair remains biased to the downside in the short term despite its recovery attempts.



GBPJPY: Follows Through On Rejection Candle, Scope Seen Towards 123.27 Level.
GBPJPY – With GBPJPY following through higher and triggering a corrective recovery the past week, scope for further strength is now seen towards its nearby resistance at the 123.27 level,  its Aug 10’ 2011 low. This is coming on the back of its previous week rejection candle formation. A decisive break and close above the 123.27 level will extend its corrective recovery possibly towards the 125.05 level, its Sept 06’2011 high. Further out, resistance comes in at the 127.31 level, its Aug 22’2011 high. Its weekly RSI is bullish and pointing higher supporting this view. Alternatively, the risk to this analysis will be a return to the 116.78 level where a decisive violation will call for a run at the 115.00 and 114.00 levels, all representing its psycho levels. All in all, though the cross continues to maintain its long term downtrend, it now faces corrective recovery risk of its recent declines.

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