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The EUR/CHF has been in a steady downtrend for almost two years.  In fact the pair has shown a strong positive correlation to the GBP/CHF during that time, which we featured yesterday (  "GBP/CHF Running Out of Steam?" href="http://www.fx360.com/commentary/brad/999/gbpchf-running-out-of-steam.aspx?num=1239400822476"> GBP/CHF Running Out of Steam? ).  Like the GBP/CHF, the EUR/CHF has rallied in a manner that is forming a bearish Gartley pattern.  The bearish Gartley would complete near the bearish trend line seen on the Weekly Chart.

We are looking to sell the EUR/CHF if it rises to 1.5361 (Point D).  Point D is located at the convergence of the following points:

78.6% Fibonacci retracement of XA.

127.2% Fibonacci extension of BC.

AB=CD.

Strong downtrend on Weekly Chart.

If RSI rises above 70.

In addition to the bearish Gartley and bearish trend line, the entry would occur near the 61.8% Fibonacci retracement on the Weekly Chart.  We will now go over what to watch for assuming the pair continues rising to our entry at 1.5361. First, we need to watch how quickly CD completes.  We are looking for the CD leg to rise slowly and enter the trade near our hypothetical entry on the 4hr Chart.  If there are long bars near the completion of the CD leg, we will not take the trade.  If the pair comes within 30 pips of reaching our entry, does not enter, and reaches T1 before entering, the trade is invalid.  The trade is also invalid if the pair falls below 1.5175 before hitting our entry.

To recap, we will look to sell the EUR/CHF at 1.5361 with our stop placed at 1.5410.  Our initial profit targets are 1.5288 (38.2% of CD) and 1.5223 (61.8% of CD).

Weekly Chart - Bearish trend line and longer term 61.8% retracement add further resistance at the sell entry.	4hr Chart - Bearish Gartley; sell @ 1.5361.

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