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In the past I've wrote an
article about EURCHF setup. We all know that currently this pair is
in a strong downtrend. But we also know that SNB set a floor –
1.2000 - for this pair. So we still have
great opportunities to trade. Currently I am building longs of this
pair. I expect that just after these problems and uncertainties with
Euro end, pair will move up. Also intervention by SNB is probable
too. Rumours about new – higher floor would fast lift the pair too. But also while trading this pair, risk
has to be calculated and stops have
to be used. We cannot be 100% sure if SNB will
defend floor. They can change their minds. In this case we would get
crash of this pair. So all positions should be reversed in this case.
Anyway I think that this scenario is least probable, because now,
when they already set the floor, changing minds would be very
damaging to Frank rate.In this
article I will shortly show the levels and what I am expecting.
In a
chart below is a daily chart of bigger picture. On a regular pair we
could expect a reversal, so with 1.2000 floor odds for a reversal are
even higher.
Below is
a 1 hour chart with uptrend line. There were few nice opportunities
to long from …
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jurga1s avatar
jurga1s 18 Fev

Not bad. Now the pair is at 1.2087, that is +23 pips from 1.2064. And that level really worked! Just in this case fundamentals means a lot too.

aurelijus avatar

Don't know, this looks dangerous.

ritesh avatar
ritesh 26 Fev

perfect analysis.

adask avatar
adask 29 Fev

Currently the pair is stuck at 1.2050. If we would look at bid line we'll see how 1.2050 is magic. We have to keep in mind this. I think SNB will not allow lower for now. And currently I see some funds forecasting 1.2700, well this is far future.

Bluedragon avatar

good luck;) +1

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EURCHF is one of the unique pairs. It's action is always interesting and regular analysis not always works on this pair. It's because Switzerland doesn't want strong Frank. Why is that? Because they export a lot and weak currency compared to others, means that products are cheaper. And we all like to buy cheaper products. So from time to time SNB (Swiss National Bank) intervenes (sells a lot of Franks, so weakens it). This is the reason why it's hard to trade on regular technical analysis. Also sometimes it's enough for rumors about intervention to come out and everybody starts to sell CHF.  Obvious and recent intervention happened at 2011 Septemper 6th. That day EURCHF pair moved ~1000 pips. Yes yes - 1000 pips in one direction and in several hours. 1 hour chart below (links to the full-sized images are listed in the end of this article).There's also a very unique thing about this pair - SNB said that bottom for this pair will be 1.2000 and they will do everything to defend this level. I do not remember any currency pair to have a bottom. It's a very big advantage, we should use in our favor. Besides, rumors are that they will set a new bottom - 1.3000. But this is not confirmed, …
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LinnuxFX avatar
LinnuxFX 24 Nov

Nice Trading approach, good luck for this article, and for the trade if you enter on it...

jonas avatar
jonas 24 Nov

Good article. But now euro/frank looks in sooo downtrend! Do you think SNB will intervene again? I would be afraid to long now.

adask avatar
adask 25 Nov

Thanks LinnuxFX. Jonas - I know that longing eurchf doesn't look good now. But I think we'll get a good trade soon. I will long at 1.2230, 1.2130 and if needed at 1.2030.

adask avatar
adask 25 Nov

Besides there's eurchf chart -
I think a nice entry level forming. But we need euro strength.

ksalam avatar
ksalam 26 Nov

Interesting and useful post. thanks.Good luck +1
Visit my article & give me your feedback.

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    On the morning of September sixth, Swiss National Bank (SNB) announced a minimal exchange rate of 1.20 for the pair EUR/CHF. This was expected, but rather unusual event in the forex market. Just after 08:00 GMT from the SNB announced that they will devote the necessary resources to support the franc at a level of at least 1.20 against the euro. The big overvaluation of the Swiss franc now poses a threat to the Swiss economy and carries a risk of deflationary spiral development. Even at a rate of 1.20, which is 8% above the today morning rate, the swiss frank is still overvalued, according to SNB and the devaluation should continue further. The SNB announced that there is consensus for buying unlimited quantities of foreign currencies (i.e. euro) if it is necessary to support this exchange rate.     The movement of about one thousand pips in only 25 minutes is such a rare event, that it is practically impossible. It could be indicated as a very unusual black swan. This is one of the many cases showing that the statistical science fail to predict the probability of such a big economic event, because they are out of the range of the normal probabilities. This wa…
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quantum_fx avatar

I am not sure, is it realy safe to buy EUR/CHF, and especcialy USD/CHF but it has some potential

NagarajaAdiga avatar

looks like Switzerland is going China way of controlling their currency value. How long will it sustain that effort is the matter of time

megajorko avatar

Very interesting

quantum_fx avatar

Thank you for the comments! It is very likely that China will free its currency in near future, but in my oppinion the SNB decision now is very risky.

Livornese avatar

Awesome article. I didn't know that in the 70s Swiss pegged their franc to the Deutsche Mark. A lot of economists said that this is the last card of SNB. Let's see! I personally put a stop loss under 1.20 :-)

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