EUR/CHF 4H chart 3/5/2013 8:55AM EST
Channels: Since bouncing off the 78.% retracement level lats week, EUR/CHF has been trading in a rising channel. Because this rally goes against the bearish trend since 1.2568 (1/18), it can be called a counter-trend channel. As we start the 3/5 session, it is closing in on a larger, falling channel resistance.
Breakouts: If the counter-trend rally continues and pushes above 1.23, it can break above the falling channel, which neutralizes the bearish outlook, and opens up the 1.2360-1.2385 resistance area as a first near-term target. Further confirmation of a broken channel can open up the 1.2567 high.
A break below 1.2237 however, breaks below the counter-trend channel, and revives the bearish outlook, putting pressure back to the 1.2120 area.
Momentum: The RSI cracked 60, but has not sustained a break above. If it tags 70 with the break above 1.23, then the near-term bullish outlook is developing. If the RSI falls back below 40 with price below 1.2237, then the bearish momentum remains persistent.