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Analysis: Reversal Pattern in EUR/CHF

Kristian A. Kerr

EUR/CHF has come under steady downside pressure over the past week or so. However, a variety of near-term focused time cycle techniques suggest the cross is nearing a medium-term turn window where a change in trend could materialize. With the Swiss National Bank frequently intervening in the exchange rate, cycle analysis becomes harder but not totally irrelevant. This is especially the case when the cyclical picture begins to turn in the direction that the central bank favors. This looks to be the case in EUR/CHF over the next few days.

The 1.2120-1.2200 area has been an important support zone since late February. A daily chart shows a potential inverse Head & Shoulders pattern (based on closing prices) forming on the daily that could lead to another push higher. The 78.6% retracement of the late April advance in the 1.2180 area marks and idealized level from which the right shoulder could carve out and we like the reward-to-risk of getting long against this level over the next few days.

EUR/CHF Daily Chart: May 2, 2013

range_eurchf_body_Picture_2.png, Analysis: Reversal Pattern in EUR/CHF

Charts Created using Marketscope – Prepared by Kristian Kerr

Event Risk Over Coming Sessions:

range_eurchf_body_Picture_1.png, Analysis: Reversal Pattern in EUR/CHF

Source: DailyFX Calendar


Resistance: 1.2290 (38% retracement of Jan to Feb decline), 1.2345 (April high)

Support: 1.2180 (78.6% retracement of late April advance), 1.2135 (April Low close)


Entry: 1.2180

Stop: Close below 1.2135

Target 1: 1.2290

Target 2: 1.2345

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter at@KKerrFX.

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