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USD/CHF To Resume Intraday Gains

Last updated 2/19/2009 1:03 PM EST (GMT -5) 0 Comments - Add your comment

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FX360 Technical Analyst Staff

Technical Analyst, GFT

The USD/CHF rally is expected to continue based on artificial intelligence forecast (provided by Foresight-A.I.™). Prices have currently stalled near 1.1750, which reflects 50% Fibonacci resistance based on the swing down to current session low at 1.1702 (point A of the developing Gartley pattern).

Today is another good example of geometric pattern price/time targets being confirmed by a Foresight-A.I.™ time/trend forecast. The significance of a geometric pattern is that in order to have a geometric shape on a two-dimensional plain (i.e. a price chart) both the X and the Y axes are taken into account. Well, on a price chart this translates into price (x axis), and time (y axis). As a result, geometric pattern recognition provides us with not just price points at which the probability for market reversal is higher, but also the approximate time that a reversal may occur.

Foresight-A.I.™ looks to identify similar patterns though which it is able to draw a timing/trend forecast. However, Foresight-A.I.™ is in no way a pricing tool. In other words, it attempts to forecast market direction (trend) along with the approximate time when reversals may occur and must be used with some type of pricing analysis. 

This is where the pricing aspect of the geometric patterns comes into play. When the Foresight-A.I.™ timing/trend forecast confirms the existing price/timing forecast of the geometric pattern, we have confirmation resulting in an even higher probability trade.

Which leads us to the point...this morning's forecast was able to confirm the bullish butterfly pattern reversal near 1.1700 at approx. 9:30a EST, and now is suggesting a continuation of the intraday rally. We have identified an intraday bearish Gartley pattern developing with projected completion at converging fib resistance near 1.1757 (T1), and 1.1771 (T2) at which points a bearish reversal may occur.

If this reversal does occur, and prices move below 1.1700, we may see prices dip down to a potential buy opportunity as highlighted in this morning's intraday technical analysis report ( here ). This puts risk to the up side at 1.1695, and targets at gartley pattern completion. At this point, the risk-to reward would not be advantageous since prices have already begun to rise towards 1.1757.  That said, we may look to buy a dip off this level to fib support near 1.1730,  then look for 1.1771 as a target followed by 1.1790-1.1800 (overnight highs, points A-C of the bearish butterfly pattern).

Otherwise, if 1.1700 support holds, and we see prices rally past bearish Gartley pattern completion near 1.1770, we could see the rally extend to 1.

2min Chart - Today's Foresight-A.I.™ forecast...	2min Chart - ...forecast was able to confirm the completion of the bullish butterfly, and suggests rally to continue to bearish Gartley pattern completion.

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