NZD/CHF: trade idea
By Dima Chernovolov
• NZD/CHF reversed from support zone
• Next buy targets - 0.6900 and 0.7000.
NZD/CHF continues to rise strongly after the earlier reversal from the powerful support zone located near the support level 0.6450 (which also previously reversed this currency pair in March and August of 2011). The upward reversal from this support zone created the weekly Japanese candlesticks reversal pattern – Piercing Line (as you can see from the weekly NZD/CHF chart below). This reversal pattern formed outside of the lower weekly Bollinger Band – which multiplied the strength of this bullish signal.
With the weekly RSI indicator starting to recover from the oversold area (which was reached as a result of the earlier sharp weekly downward impulse) NZD/CHF is likely to correct further up toward the next resistance levels 0.6900 and 0.7000.