During the session on Tuesday, the EUR/CHF pair fell initially, testing the 1.08 handle for support. It did in fact find it there, so having said that it appears that the uptrend should continue, and it’s probably only a matter of time before we rally from here. A break above the top of the hammer would be reason enough to start going long in my opinion. In fact, I’m comfortable buying here simply because the 1.08 level has been so supportive, and of course there’s quite a bit of noise just below it. With that, I feel that the market will continue to reach towards the 1.10 handle. The significance of that level cannot be overstated at this point in time. It is above there that I feel that the entire trend changes.
1.20?
If we can break above the recent highs, I feel that the market will then try to reach towards the 1.20 level. It might take a while to get there, but eventually we should reach that level as there is almost nothing in the way of resistance above the 1.10 level, extending all the way to the 1.20 handle. That is an area that of course was significant because it was where the Swiss National Bank had kept its currency pair yet. When they gave it up, the market fell apart from there and then simply dropped in a massive freefall that wiped out several firms and unknown amounts of private traders.
In a freefall like that, there’s almost no where you can find resistance. It is because of this that I believe ultimately we will reach towards the 1.20 level, and then the move above the 1.10 level is a sign that we are about to head towards that area. Don't get me wrong, I don’t have any illusions that is going to be easy, that’s a long-term call my opinion. I don’t really have a scenario in which a willing to sell this pair.
