EUR/CHF holds above key support levels
EURCHF continues to trade and hold above key resistance levels (1.5662/51) broken last week from an ascending triangle pattern. This comes after the cross made a high (1.5856) in April’06 followed by a low (1.5450) in May’06 and then a subsequent six-week consolidation forming an ascending triangle.
Now that EURCHF holds above breakout point, how far can it likely go? The price target for this pattern comes in at 1.5844(black horizontal line), which coincides with its April high at 1.5856.The above price target is established by taking the width of the pattern and projecting it from the breakout point(indicated by the blue arrows).
Looking at the chart below this cross is not only holding above its breakout point but also trading above its 50,100 and 200 emas suggesting more strength and strong support. In addition, weekly studies are pushing higher thus supporting this view. On the other hand, we are beginning to see the daily momentum studies in an overbought environment implying that we might experience a pullback or consolidation on this cross’s upside expedition. This should not be a cause for concern, as it will allow more strength to build for the task ahead. Moreover, such pullbacks should present buying opportunities.
Figure 1: Daily Chart
Figure 2: Weekly Chart
Finally, this new upside move has changed both the near term and short-term outlook to positive.
Happy Trading.