EUR/CHF To Resume Uptrend At 1.5056?

Last updated 11/13/2009 7:01 PM EST (GMT -5) 8 Comments

Bradley W. Gareiss

Technical Analyst, GFT

A bullish butterfly pattern is forming on the EUR/CHF 8hr Chart below. This trade has excellent price symmetry and great time symmetry up until this point. The trade would answer just below the bullish trend line on the Weekly Chart. Be careful of a large gap down over the weekend, as this could create more downward momentum than we would like.

We are looking to buy the EUR/CHF if the pair falls to 1.5056 (Point D). Point D is located at the convergence of the following levels:

We will now go over what to watch for assuming the EUR/CHF continues falling toward our entry at 1.5056. If the pair moves down rapidly and has long bars near point D, we will not enter the trade. However, long bars at this point are unlikely because we are so close to entry. Also, if the pair comes within 7 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 rises above 1.5145 before hitting our entry.

To recap, we will look to buy the EUR/CHF at 1.5056 with our stop placed at 1.5029. Our initial profit targets are 1.5096 (38.2% of CD) and 1.5125 (61.8% of CD).

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  • Weekly Chart - Trade would open just below bullish trend line.
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  • 8hr Chart - Bullish butterfly; buy at 1.5056.

Comments (8)

jet

November 16, 2009 at 11:16 AM ET

yes i question if it will get that low as well like dragon no telling i guess but if it does i'll buy more :)

FXDragon

November 14, 2009 at 08:08 AM ET

SNB intervention likely around 5085. I prefer long with no sl.

Robert Taylor

November 15, 2009 at 07:34 AM ET

Bradley,

I like this pair the EUR/CHF because it fits my account size with generally a small ADR. How can I learn more of the daily or yearly habits of this pair.

Thanks
BobT

bgareiss

November 16, 2009 at 01:48 PM ET

If you take away the labels on the chart (pair, price, and time), all highly liquid pairs pretty much look the same. If you are trading technically, then it is best that your system applies to all pairs. As far as fundamental analysis goes, I only check when news announcements are so I can avoid them. Brad

phi

November 24, 2009 at 07:21 PM ET

Bradley,

Is this pair still in play?

Thanks

bgareiss

November 24, 2009 at 07:28 PM ET

Yes, it technically is according to the article (missed invalidation by 1 pip). Somehow it was taken off the trade tracker, but I will add it. I will also redraw this trade tomorrow because it actually looks even better than before because of a secondary ABCD. Thanks for the heads up. Brad

pp22

November 16, 2009 at 02:45 PM ET

Hey Brad
I just wanted to verify if the EUR/USD and the GPB/USD were invalidated. Also do you think the USD/JPY recomendation is having long bars right now?

Thanks

Phil

bgareiss

November 16, 2009 at 04:03 PM ET

The EUR/USD and GBP/USD trades are invalidated. The USD/JPY is too early to tell for long bars. If the pair slowly goes down from now, then it should be good. However, I would be cautious if it shoots straight down from this point forward. Brad

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