By: Doug Rosen
One glimpse at the weekly chart for this pair it is obvious it continues its heavy drop to the down side. This pair is correlated with he USD/CFH in that they are perfect opposites most of the time, exact reciprocals if you may and we have established in our analyst with the European cross pairs that the EUR is the weaker currency of the three currency's and the USD appears to be stronger than he CHF. Based on this logic we expect the USD to be stronger than the EUR which would make this pair bearish.
On the daily chart price is looking very heavy, yet it has fallen out from within the Bollinger bands and uis beginning to walk along the lower band to the downside and has been riding the 5 ema downward but the conditions do in fact exist for price to possibly slow down just a bit for the daily 5 to catch up and for price to get back in within the bands. We must also note that price is int he oversold zone of the Stochastics.
Moving over to the 4 hour chart, price is gracefully riding down along the 5 ema, just as it also has been on the hourly chart, however, on both the 4 hour and the hourly price is in the oversold zone of the stochastics, a possible indication that a retracement is probable. On the 15 minute chart same bearish conditions do apply with a descending trend line and 55 ema in control, however, stochastics is beginning to point and cross upward and I am noticing a higher low, an early warning sign that the 15 minute downtrend may be diminishing and that bullish retracement may soon be developing. Price is bounding off the monthly and weekly S2 reversal pivot point as well as yesterdays low overlapped with the daily M2 reversal pivot point. This does not mean you should look for reasons to long even though you could if you time it right. It simply means that a bullish retracement conditions do exist on this bearish pair and that maybe we should not rush into a short just yet but just wait for price to retrace a bit, say, maybe back to the Trend line on the 15 minute chart or even as high as the M3 which will soon be overlapped by the 15 minute 144 ema that should force price to continue downward. Counter trend trades are not out of the question however, just be aware that while counter trend trading an extremely bearish pair such as this pair you will run into sellers at just about every slight resistance level on the way up and the only thing you can hope for is triggered stop looses from current bears caused by profit taking or news announcements causing price spikes to the upside.
