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AUD/CHF to Resume Uptrend at 0.9654?

Last updated 1/27/2012 6:44 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

A bullish butterfly pattern is currently forming on the AUD/CHF 2hr Chart. The pattern has solid price symmetry, although it is too early to judge its time symmetry.  For proper time symmetry, we would like the CD leg to slow down and drop with approximately the same slope as AB.  The trade would also enter at 38.2% of YZ and the secondary ABCD on the 8hr Chart.  Take note that this trade idea is very similar to the short opportunity on the EUR/AUD, and this should be accounted for when determining position size according to your risk management strategy.  This trade would be invalidated if it rises to 0.9817 before entering.

The pattern suggest buying the AUD/CHF if it falls to 0.9654 (Point D).  Point D is located at the convergence of the following points:

To recap, the pattern suggests buying the AUD/CHF at 0.9654 with our stop placed at 0.9620.  Our initial profit target is 0.9705 (38.2% of CD).

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  • 8hr Chart - Trade would enter at 38.2% of YZ and within a secondary ABCD.
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  • 2hr Chart - Bullish butterfly; buy at 0.9654.

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