The EUR/CHF pair broke higher during the session on Tuesday, clearing the 1.06 level at one point in time. However, what I found more important was the fact that we broke above the top of the shooting star for the Monday session, and that of course is a very positive sign for this market. That doesn’t mean that I’m willing to buy this market though, it just means that we could get a better entry point for short positions. That being said, you have to look at it as value in the Swiss franc, if we can go higher that as.
I believe that some large, round, psychologically significant number above will cause quite a bit of resistance and we will get a resistive candle from which to short. However, we have to see how much profit taking there is, and we also have to recognize that the Euro in general is getting a little bit of a reprieve at the moment in the Forex markets. That of course carries over into this pair, but ultimately this is a market that is simply too dangerous to start buying. If I was to buy the Euro, it would be in a different pair, and not what is essentially “Ground Zero” of the Swiss franc story right now.
Patience will be required
Patience will be required in order to trade this pair, as this is more of a longer-term situation than a short-term one. After all, with so much pressure on the Euro in general, I believe that it is more than likely going to be a marketplace that drops significantly from here again. However, that doesn’t necessarily mean that we will get the entry in this general vicinity. I simply am looking for the right resistance in order to start going short of this pair, and I will compare what the Euro is going against several other currencies at the same time. After all, this should be a move that will be driven by the Euro more than anything else right now.
