Reviewing the Weekly Charts

As I mentioned in my previous post regarding the Commitment of Traders Report, there was a substantial decrease in short positions in the EUR, GBP, CHF, and AUD.  These positions were not replaced with long positions.  I take this as being a consolidative signal as the balance between net longs and net shorts is approaching. 

I’ve also been looking at the weekly charts as I do on most weekends.  I wonder if the USD will have another down week? One chart I would like to point out in the CHF Weekly where RSI bearish divergence is evident.

From what I’ve read about RSI, it was designed to anticipate price changes and if a divergence occurs, it should be taken as merely an alert for the trader.  This alert raises the possibility that a reaction will occur or maybe a reversal of trend.  Bearish RSI divergence IS NOT a sell signal.  A swing trade should be confirmed with an additional indicator such as moving average crossover or the break of a trendline.  A break of the trendline at 1.2650 could be a confirmation but as of now there is no moving average crossover confirmation as the 8 period EMA > 21 EMA  > 55 EMA.   

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