The EUR/CHF pair spent most the day going higher on Thursday, but in late day trading ended up falling back down to form a shooting star. There is the 50 day exponential moving average that is coinciding with the recent action at the 1.05 handle, so perhaps a longer-term traders got involved. The fact that we formed a shooting star is of course very negative, so I think that it’s only a matter time before the sellers really begin to push this pair lower. I do not like going long of this market because the area above the 1.05 level has so much noise, and on top of that the noise is extending to the 1.08 handle. With that being the case, I feel that this can be very difficult to hang onto any bullish positions. Most certainly it will be easier to sell this pair, as you have the weight of the market working for you.
Expect volatility no matter what
I believe this pair can be a real huge pain to say the least. I think that selling is going to be the only way to go, but even if you are on the right side of the trade, you can expect a lot of jittery action. This of course will make newer traders a bit nervous, as it should. It’s quite ironic really, as this was once a very stable and boring pair. However, it has now become one of the more dangerous wants to deal with. Having said that though, the Euro itself is a very volatile currency these days.
It’s only a matter time before we head back to the 1.02 level from what I am seeing on this chart. If we break down below the bottom of that shooting star that form, I feel that it’s probably time to start selling. I could buy above the top of the shooting star, but again I see so much choppiness above that quite frankly it’s probably going to be best left alone until we clear the 1.08 handle, something that I think is going to take a significant amount of time in momentum.
