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EUR/CHF Trade Update

Last updated 3/25/2009 7:28 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

Today we will look at a EUR/CHF bullish butterfly for the third time.  Yesterday, we examined the pattern when it was near completion (  "EUR/CHF Near Buying Opportunity" href="http://www.fx360.com/commentary/brad/892/eurchf-near-buying-opportunity.aspx?num=1238020880953"> EUR/CHF Near Buying Opportunity ).  The trade entered and immediately shot up.  Notice that this trade is slightly different than the trade FX360 Technical Analyst Staff has been following recent days, although the pattern is the same.  We inadvertently posted the same basic pattern, and now we must each follow up.  Notice that the entries and exits are just slightly different, but the trade is basically the same at this point.  Since we have hit our first profit target, it is no longer possible to enter this trade.

We have hit the first profit target on this trade and came close to hitting the second target.  However, the pair dropped before hitting both targets and is now hovering between the entry and the first profit target.  First, we will move our stop to 1.5187.  This means that the second half of the trade will be break even at worst.  It also is a good point to put the stop as a recent low has been established 1.5196.  If we make a strong new low below that level, it is unlikely we would still have an edge in the trade.

We will leave the second profit target at 1.5298 although the actual 61.8% retracement of CD is at 1.5303.  This means that we still will be able to take the initial profit we were looking for even if the pair falls short of the target by a few pips.  We calculated that ratio using 1.5377 as point C and 1.5184 as point D.

We will be out of the trade soon whether we hit the second profit target or the stop.  Once we are out of the trade, this is a dead opportunity, and we will not have an edge that suggests going long or going short.  Therefore, we will wait for a new a pattern to form when this trade hits it final exit.

8hr Chart - There was support at the previous significant high as we suggested in yesterday's report.	1hr Chart - Bullish butterfly.

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