The EUR/CHF pair has been a pair that could quite frankly put you to sleep if you didn't know what you are looking at. After all, it is a pair that has a fairly tight range most of the time, but that is a quick way to make money if you pay attention. The fact that we formed a hammer on Wednesday is interesting to me. What's even more interesting is that we formed one on Tuesday as well. I believe that we have a significant amount of support at the 1.03 level at the moment, and that if we can break above the top of the hammer from the Tuesday and Wednesday sessions, I don’t really see why this market can go to the 1.05 handle. In fact, I am more than willing to take the trade and believe that taking profit just below the 1.05 level is essentially the closest thing to a “no-brainer” trade that you will find in the Forex markets.
This pair is being held hostage
What I mean by “this pair is being held hostage” is that there are so many noisy headlines coming out of Athens and Germany that it’s almost impossible to trade this market cleanly sometimes. It really can go anywhere, because on one hand you have the European Union which of course is an absolute mess and everyone knows it, but on the other hand you have Switzerland which is highly leveraged to the European economy. I don’t care if the Swiss National Bank essentially severed ties with the Euro, as it abandoned the currency peg. The truth of the matter is that 85% of exports out of Switzerland end up in the EU. The central bank and do what it wants, but at the end of the day the 2 economies and currencies are intertwined. Because of this, one will always influence the other, with of course more influence been found in Switzerland due to what’s going on in the European Union than the other way around. Because of this, I think we remain range bound, but that doesn’t mean you should avoid this pair.
