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Resistance ahead for EUR/CHF

Last updated 2/9/2009 6:55 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

The EUR/CHF plunged in the middle of December 2008 and has moved relatively sideways since the beginning of the New Year.  However, if the pair continues to rebound, it may form a very nice bearish ABCD.  If we look back further, we see significant highs that form both a bearish Gartley and a bearish butterfly pattern.

We are looking to sell the EUR/CHF at point D (1.5432).  Point D is located at the convergence of the following points:

We will ideally see a shorter term pattern that leads into this trade.  If there is no shorter term pattern that develops, we will at least look for an entry without long bars at the end of the CD leg.  So far, the time symmetry has been very solid.

To recap, we will look to sell the EUR/CHF at 1.5432 with our stop placed at 1.5575.  Our initial profit targets are 1.5238 (38.2% of CD) and 1.5080(61.8% of CD).  As usual, it is key that we use a stop because the pair could rally indefinitely if the pattern is broken.

Daily Chart - 1.5412 is the 61.8% Fibonacci retracement of XA.	8hr Chart - Bearish butterfly; sell @ 1.5432.

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