Update: EUR/CHF To Resume Uptrend At 1.5056?

Last updated 11/25/2009 8:00 PM EST (GMT -5) 5 Comments

Forex Trading involves high risks, with the potential for substantial losses and is not suitable for all persons. Past performance is not necessarily indicative of futures results.

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. There is also a secondary ABCD pattern forming within the CD leg that adds further convergence to this pattern. Be careful of a large gap down over the Thanksgiving 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 1.5113 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 (5)

ALEJANDRO

November 26, 2009 at 03:01 PM ET

Despite relevance of tech aspects, rather trade this one on SwissNB key levels

bgareiss

November 27, 2009 at 03:35 PM ET

Alejandro, are you on the board for the Swiss Bank? All joking aside, I don't think anyone can accurately predict what bank will do, unless you are a decision maker for the bank. Brad

djcash

November 26, 2009 at 05:55 AM ET

I think that this has now been invalidated due to long bars and having dived down through the stop.
Dave

bgareiss

November 27, 2009 at 03:34 PM ET

I certainly wouldn't have taken this trade, but it isn't unreasonable for someone to have had this trade set up. Wild moves like this are impossible to predict, and are a good reason why anyone that say they wins almost every time is full of it. We marked it as a loss on the trade tracker, but hopefully not many people took this one. Brad

fxandres

November 26, 2009 at 09:07 PM ET

Hi, Brad , a Bullish Gartley Pattern is forming, in GBPUSD 4 H chart, i would like to know if This trade has good price symmetry and great time symmetry, the entry point is in 1.6381. thanks. Andrés

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