The EUR/CHF pair broke down during the course of the session on Tuesday, breaking below the 1.05 level. However, as you can see on the attached chart that there is a significant amount of support just below. That’s essentially were the market bounced from, and as a result I feel that if we can break down below the lows of the range, this would be a nice selling opportunity as it would be a continuation of the massive bearish trend that we have seen recently. I believe that the Euro continues to suffer overall, and it most certainly looks soft at this moment against most currencies, as we have formed to shooting stars in several different markets such as the EUR/USD and the EUR/JPY pairs. Normally when you see this, you will see the currency fall all across the board.
Selling rallies on short-term charts
I believe that selling rallies on short-term charts could also be a decent strategy, and that will more than likely end up giving you a bit of profit. On the other hand, we break down below the lows for the session on Tuesday that is the “greenlight” to start selling in my opinion. I think that selling those short-term rallies that came after that breakdown should be an opportunity to continue to profit based upon the strength of the Swiss franc, and probably more importantly the weakness of the Euro as it has of course been beaten up so much.
Ultimately, any time we rally I will look at this market with suspicion, and have absolutely no interest whatsoever in buying as the market did break down so significantly, and of course this is “Ground Zero” of all of the drama surrounding the Swiss franc recently. Ultimately, I believe that we will go back down to the parity level, and then eventually the 0.97 level again. I don’t have any longer-term predictions, because I believe that the Swiss National Bank will eventually get involved again, because the soft Euro is going to play havoc with the Swiss economy given enough time.
