All Trade Ideas and trading scenarios found on FX360.com are hypothetical. FX360.com has not placed these Ideas in a live trading environment. Forex Trading involves high risks, with the potential for substantial losses that exceed your initial deposit and is not suitable for all persons. Past performance is not necessarily indicative of futures results.

Rare Bullish Pattern Forming on EUR/CHF

Last updated 3/26/2009 6:56 PM EST (GMT -5) 0 Comments - Add your comment

• Share this:

Bradley W. Gareiss

Technical Analyst, GFT

The EUR/CHF is developing another high probability geometric pattern.  It is interesting that this pair has shown excellent symmetry lately while most other crosses are not providing trading opportunities.  The bullish butterfly that we had been tracking has completed, and the pair is now moving down off resistance at our second profit target from that pattern ( "EUR/CHF Trade Update" href="http://www.fx360.com/commentary/brad/900/eurchf-trade-update.aspx?num=1238106808707"> EUR/CHF Trade Update ).  The latest move down is leading to a potential bullish 3 drives pattern.  This pattern is fairly rare but offers a great risk:reward ratio typically.

We are looking to buy the EUR/CHF at 1.5117, which is at point 3.  Point 3, or the third drive, is located at the convergence of the following points:

This pattern is especially exciting because it converges with the exact 38.2% level seen on the 4hr Chart.  Additionally, we are bullish on the EUR/CHF because of the huge move up seen on the 4hr Chart.  This is an exceptional amount of convergence.  As usual, we will watch for long bars in the C3 leg, especially as we approach the entry.  No matter how strong a pattern is, rapidly moving long bars can quickly invalidate the trade.  Also, if the pair comes within 10 pips of the entry and hits T1 without hitting the entry first, the trade is invalid.  Finally, the trade is invalid if it rises above 1.5300 before reaching our entry.

To recap, we will look to buy the EUR/CHF at1.5117 with our stop placed at 1.5060.  Our initial profit targets are 1.5213 (38.2% of CD) and 1.5294 (61.8% of CD).

4hr Chart - Pattern would complete at the exact 38.2% retracement.	2hr Chart - Bullish 3 Drives Pattern; buy @ 1.5117.

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

The views of the authors and analysts are not necessarily those of Global Forex Trading, its owners, officers, agents or other employees. FX360.com and the currency research team will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on FX360.com. Global Forex Trading and the currency research team do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

Loading...