The EUR/CHF pair initially pulled back during the course of the session on Thursday, but found enough support near the 1.09 level to turn things around completely and form a hammer. With that being the case, it appears that the market will more than likely try to go higher, and if we can break above the 1.10 level, this market could very well be free to finally make the longer-term move higher than that I have anticipated seeing for some time now. With that being the case, it’s very likely that it will take a significant amount of pressure, in order to break through this barrier finally.
All things being equal though, I believe that a move above the 1.10 level sends this market looking for the next natural barrier above, the 1.15 handle. Ultimately, I think that we could go even higher than that, probably to the 1.20 level where the Swiss National Bank initially had the currency peg set. We gave that up though, as the SNB step away from the currency peg after 4 long years. Ultimately, this market appears as if it is ready to try to reach that level again.
Longer-term move
I’ve been waiting for this breakup for some time now, and if we can break above I feel that it is a longer-term move. It’s basically 1000 pips waiting to happen, but there will be pullbacks from time to time that offer value and should attract more buyers as we go along. I think this is a longer-term trade waiting to happen for those who are more long-term oriented. I also think that a lot of careers will be made by this move, which is kind of ironic considering how obvious the levels are. However, sometimes it’s the obvious play that is the easiest and most logical one. It appears that there is a massive amount of support below, so quite frankly I have no scenario in which I sell this pair. Try not to over think this, it’s very likely that we go to the 1.20 level over the longer term.
