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EUR/CHF May Face Strong Support

Last updated 3/17/2009 6:38 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

Last week, there was a massive move up on the EUR/CHF.  The cause of the move is fairly irrelevant, but the bullish momentum that could result from the move is important to consider.  After the huge bar, the pair has stabilized.  If the pair continues to fall, we could see both a bullish Gartley and double bottom that would suggest the bullish momentum could continue.

We are looking to buy the EUR/CHF at point D (1.5267).  Point D is located at the convergence of the following points:

This is a fairly straightforward trade setup.  The most important thing to watch for are long bars near the completion of the trade.  Long bars would be especially worrisome because they would make a new low and we could see a huge drop down if we make a strong new low.  Additionally, the trade setup will be invalid if the pair rises above 1.5405.

To recap, we will look to buy the EUR/CHF at 1.5267 with our stop placed at 1.5237.  Our initial profit targets are 1.5307 (38.2% of CD) and 1.5340 (61.8% of CD).

4hr Chart - Massive bar up may create future bullish momentum.	1hr Chart - Bullish Gartley; buy @ 1.5267.

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