Talking Points
- Broke the 200-day MA this week
- Still at the low end of a 3-month range
- SNB supporting the cross
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EUR/CHF has been locked in a clear sideways to lower range for the better part of three months. On the downside this range has been supported by the 200-day moving average until the start of this week when the upwards sloping 200-day moving average near 1.2300 was eclipsed on both an intraday and daily close basis. Technically this suggests a potential change in trend is occurring. However, in our experience there is usually a lot of “noise” surrounding the initial break of widely watched indicators like a 200-day moving average and often times such breaks lead to powerful moves back in the direction of the trend as aggressive breakout type traders are forced to cover. Given EUR/CHF is at the bottom end of a clear range and has the support of the SNB, such a false break scenario materializing here is not that unlikely. We like positioning for such a potential scenario with a buy stop over today’s intraday high of 1.2309. Any weakness below Monday’s low of 1.2275 would turn the technical picture much more negative.
EUR/CHF Daily Chart: September 25, 2013
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risks in Coming Sessions:
LEVELS TO WATCH
Resistance: 1.2309 (intra-day high), 1.2380 (Fibonacci)
Support: 1.2275 (Monday’s low), 1.2300(Psychological)
Strategy: Buy EUR/CHF
Entry: Buy EUR/CHF on a break of 1.2309
Stop: 1.2269
Target: 1.2295
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
Are you looking for other ways to pinpoint support and resistance levels? Take our free tutorial on using Fibonacci retracements.
To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter at@KKerrFX.
