By: Doug Rosen
We begin our analysis for this pair first by utilizing a relative strength exercise. We look at both the EUR/CHF and the GBPCHF. Starting out with the EURCHF Weekly chart we see that price is and has been bullish.
Also, we can see that EUR/CHF weekly price is nearing the 55 ema as well as a descending trend line. This trend line has been respected three other times in the past and more than likely will react the very next time it is touched. The level to watch for a reaction would be around 1.2450 area. It will either break out of the trap or drop. We will have to wait and see.
The GBPCHF pair looks very similar to the EUR/CHF pair. It too has been bullish but is now coming up to a resistance area overlapped with a 55 ema that has been respected at least 3 times in the past. A reaction at around 1.4450 should also be expected. If both these pairs reach this resistance area around the same time the CHF will get strong and the USD will grow weak.
Moving over to the EUR/GBP weekly chart we see that price is coming up to the 55, 21,and 13 ema's, this is strong resistance. Resistance like this can force this pair down making the GBP the stronger currency and if this can be timed with the EUR/CHF bouncing off resistance it could make for a weak EUR.
Moving over to the daily chart we see that we already did hit resistance and reacted from it. Price wicked the 233 and 55 ema on the daily and dropped 45 Pips. This drop created a fib and the 5 ema on the daily is close to crossing above the 13 ema and I am expecting price to fall to around 0.8654 area where it should pick up some more buyers then head up to at least 0.8755 where it will have to make a decision.
Looking at the 4 hour chart price has fibbed off the 38.2 level overlapped with the 5 ema and that coincides with the hourly 21 ema and the daily central pivot point all very bullish so I expect this pair to continue on its bullish trend. A break of 0.8700 which is the monthly and weekly R1 would predict a rise to the 0.8745 region which is last month's and last week's high.