Trade Idea: USD/CHF — Buy at 1.0585

USD/CHF - 1.0708

Most recent candlesticks pattern : N/A
Trend : Up

Tenkan-Sen level : 1.0745
Kijun-Sen level : 1.0647
Ichimoku cloud top : 1.0566
Ichimoku cloud bottom : 1.0505

Original strategy :

Buy at 1.0650, Target: 1.0850, Stop: 1.0585

New strategy :

Buy at 1.0585, Target: 1.0780, Stop: 1.0520

As the greenback has retreated after faltering below resistance at 1.0800 (Friday’s high), suggesting further consolidation below there would be seen and pullback to the Kijun-Sen (now at 1.0647) is likely, however, dollar should find decent demand around 1.0580/85 (approx. 38.2% Fibonacci retracement of 1.0227 to 1.0800) and the Ichimoku cloud top (now at 1.0566) would hold, bring another rally later. Above said resistance would extend recent upmove from 2009 low of 0.9910 to 1.0822-26 (38.2% Fibonacci retracement of 1.2298 to 0.9910 and 50% Fibonacci retracement of 1.1742 to 0.9910) and then 1.0850. Having said that, overbought condition should limit upside to 1.0870 (1.236 times projection of 0.9910 to 1.0509 measuring from 1.0130) and reckon 1.0939 (50% Fibonacci retracement of 1.1967 to 0.9910) would remain intact, yield retreat later.

In view of the above analysis, we prefer to buy dollar on further corrective fall. Only below 1.0497-1.0505 (previous support and current level of the lower Kumo) would signal top has been formed.

Based on ActionForex.com Technical Outlook