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EUR/CHF Near Buying Opportunity

Last updated 3/24/2009 7:01 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

We looked at two different patterns that were forming on the EUR/CHF is yesterday's feature ( 3/23/09 ).  The pair has moved down since we posted that feature, and it is now approaching the completion of the bullish butterfly.  Therefore, we have invalidated the potential bearish Gartley/double top that was shown yesterday.  The bullish butterfly is drawn with the exact same entries and exits as the previous feature, however the actual chart has been updated.

We are looking to buy the EUR/CHF if it falls to 1.5187, which is at point D.  Point D is located at the convergence of the following points:

Yesterday, we did not acknowledge that our entry level has been a significant level of both support and resistance in the past.  Most recently, we see a significant high on the 8hr Chart within a few pips of our entry.  We also see that the CD leg has moved down very nicely.  It is moving at a similar slope to the AB leg, which is what we are looking for.  The trade is invalidated if the pair rises to 1.5270 before hitting the entry.  Also, if the pair drops within a few pips of the entry (but does not enter) and reaches T1 before hitting the entry, the trade will also be invalidated.

To recap, we plan to buy the EUR/CHF at 1.5187 with our stop placed at 1.5147.  Our initial profit targets will be 1.5247 (38.2% of CD) and 1.5298 (61.8% of CD).

8hr Chart - Sharp uptrend creating momentum and a previous significant high at the entry.	1hr Chart - Bullish Butterfly; buy @ 1.5187.

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