EUR/CHF - LONG - ANALYSIS + EXPLANATION
Updated
The "EUR/CHF" has been in a downtrend since March – 2021, and it is obvious that we can expect a trend reversal if necessary.
> The EUR is the base currency of the pair and has suffered greatly from the USD (DXY) appreciation.
> The CHF is generally seen as a security, which is why the EUR is losing out to them.
--> Once the USD (DXY) shows signs of corrective behavior, I personally expect a significant upswing.
= What this upswing might look like, I'll let you know in the following lines.
Table of contents
- 1st part = CURRENT STATE
- 2nd part = TARGET ZONE PROPERTIES
- 3rd part = CONCLUSION
PART ONE
Since the end of July until today, a formation has formed, which is also known as the "Head&Shoulders - pattern".
--> This is formed in the EUR/CHF "OVERCOME", which is usually ended with a "Bullish" breakout.
--> The neckline (breakout line) of the pattern, is located at the resistance line (gold-spiked), which has formed since March / 2020.
Thus, it can be concluded that if the pattern breaks out "successfully", we will also break the resistance line.
After the break of this resistance line, the following sequence of events would be possible:
1. SHORT-TERM TARGET = 1.618 FIB -> 0.98977
2. TEST = of the broken resistance -> conversion into support
3. TARGET = TARGET ZONE 1
SECOND PART
"TARGET ZONES" are drawn on the chart, all of which have "concentrated" resistance characteristics.
1. | TARGET ZONE | 0.99718 - 1.00000 | points
RESISTANCE - CHARACTERISTICS
- "MSB" (Market Structure Break) | March/2022 LL.
- "FIB" (Fibonacci) = 0.328s | Created March/2021 - September/2022
- "POI" (Point of interest) = 1.00000 | Psychologically important resistance level
- "MA" (Simple Moving Average) = 8-long | Monthly chart
- "ICHIMOKU CLOUD" = Conversion line | Weekly chart + Baseline | Monthly chart
- "VP" (Volume Profile) = GAP in the zone | Not much volume traded = little resistance.
2. | TARGET ZONE | 1.00879 - 1.01526 | points
RESISTANCE - CHARACTERISTICS
- "MSB" (market structure break) | HL of April/2022
- "FIB" (Fibonacci) = 0.618s + 0.65s | Created = May/2022 - September/2022
- "FIB" (Fibonacci) = 1.618s | Originated = 02/09/2022 - 26/09/2022
- "POI" (Point of interest) = 1.01000 | Psychologically important resistance
- "MA" (Simple Moving Average) = 50-length | weekly chart + 200-length | daily chart
- "ICHIMOKU CLOUD" = no resistance in the HTF (Higher time frame) time levels T / W / M
- "VP" (Volume Profile) = small volume | not much past traded volume = little resistance to the upside.
3. | TARGET ZONE | 1.02391 - 1.02791 | points
RESISTANCE - CHARACTERISTICS
- "RESISTANCE LINE" | Created September/2021 (4x touches).
- "FIB" (Fibonacci) = 0.75s + 0.786s | Created = May/2022 - September/2022
- "POI" (Point of interest) = 1.02500 | Psychologically important resistance level
- "SUPPLY ZONE" = | Monthly chart
- "ICHIMOKU CLOUD" = Cloud resistance | Weekly chart + Conversion line | Monthly chart
- "VP" (Volume Profile) = Strong Volume | Much Past Traded Volume = Major Resistance.
X. | POI ZONE | 1.03736 - 1.03936 | Points
RESISTANCE - CHARACTERISTICS
- "FIB" (Fibonacci) = 0.88s | Originated = May/2022 - September/2022
- "POI" (Point of interest) = 1,04000 | Psychologically important resistance
- "SUPPLY ZONES" = | Daily + Weekly chart
- "VP" (Volume Profile) = Strongest volume | Highest past traded volume concentration = Very large resistance.
- "MA" (Simple Moving Average) = 50-length | monthly chart.
- "ICHIMOKU CLOUD" = no resistance in HTF (Higher time frame) time levels T / W / M
4th | TARGET ZONE | 1.04839 - 1.05398 | points
RESISTANCE PROPERTIES
- "FIB" (Fibonacci) = 0.618s + 0.65s | Created March/2021 - September/2022
- "POI" (Point of interest) = 1.05000 | Psychologically important resistance level
- "MA" (Simple Moving Average) = 100-length | weekly chart + 50-length | monthly chart
- SUPPLY ZONES" = daily + weekly + monthly chart
- "VP" (Volume Profile) = GAP in the zone | Not much past traded volume = little resistance to the upside.
CONCLUSION
You now know what the scenario for "EUR/CHF" could look like.
The following conditions must be met:
- DXY (USD) starts to CORRECT = pressure way fall for the EUR -> EUR more dominant than CHF
- BREAKOUT of the H&S pattern
-> OVERCOME the resistance line + successful back-test
= transformation into a support line.
- DEVELOPMENT of the individual ZONES and their relevant resistance properties.
PS:
+ I have once taken the liberty to draw a possible "course", so you can see how it could run.
+ Many of the indicators described are not visible in the chart, so that a clear view remains.
-> Feel free to discuss it in the comments and share our perspectives, I'd be "burning" to hear your take on the whole thing.
If this idea and explanation has added value to you, I would be very happy to receive a review of it.
Thank you and happy trading!
For anyone who would still enjoy the other HTF and want to hide all the "noise" - following the weekly and monthly chart.
> The EUR is the base currency of the pair and has suffered greatly from the USD (DXY) appreciation.
> The CHF is generally seen as a security, which is why the EUR is losing out to them.
--> Once the USD (DXY) shows signs of corrective behavior, I personally expect a significant upswing.
= What this upswing might look like, I'll let you know in the following lines.
Table of contents
- 1st part = CURRENT STATE
- 2nd part = TARGET ZONE PROPERTIES
- 3rd part = CONCLUSION
PART ONE
Since the end of July until today, a formation has formed, which is also known as the "Head&Shoulders - pattern".
--> This is formed in the EUR/CHF "OVERCOME", which is usually ended with a "Bullish" breakout.
--> The neckline (breakout line) of the pattern, is located at the resistance line (gold-spiked), which has formed since March / 2020.
Thus, it can be concluded that if the pattern breaks out "successfully", we will also break the resistance line.
After the break of this resistance line, the following sequence of events would be possible:
1. SHORT-TERM TARGET = 1.618 FIB -> 0.98977
2. TEST = of the broken resistance -> conversion into support
3. TARGET = TARGET ZONE 1
SECOND PART
"TARGET ZONES" are drawn on the chart, all of which have "concentrated" resistance characteristics.
1. | TARGET ZONE | 0.99718 - 1.00000 | points
RESISTANCE - CHARACTERISTICS
- "MSB" (Market Structure Break) | March/2022 LL.
- "FIB" (Fibonacci) = 0.328s | Created March/2021 - September/2022
- "POI" (Point of interest) = 1.00000 | Psychologically important resistance level
- "MA" (Simple Moving Average) = 8-long | Monthly chart
- "ICHIMOKU CLOUD" = Conversion line | Weekly chart + Baseline | Monthly chart
- "VP" (Volume Profile) = GAP in the zone | Not much volume traded = little resistance.
2. | TARGET ZONE | 1.00879 - 1.01526 | points
RESISTANCE - CHARACTERISTICS
- "MSB" (market structure break) | HL of April/2022
- "FIB" (Fibonacci) = 0.618s + 0.65s | Created = May/2022 - September/2022
- "FIB" (Fibonacci) = 1.618s | Originated = 02/09/2022 - 26/09/2022
- "POI" (Point of interest) = 1.01000 | Psychologically important resistance
- "MA" (Simple Moving Average) = 50-length | weekly chart + 200-length | daily chart
- "ICHIMOKU CLOUD" = no resistance in the HTF (Higher time frame) time levels T / W / M
- "VP" (Volume Profile) = small volume | not much past traded volume = little resistance to the upside.
3. | TARGET ZONE | 1.02391 - 1.02791 | points
RESISTANCE - CHARACTERISTICS
- "RESISTANCE LINE" | Created September/2021 (4x touches).
- "FIB" (Fibonacci) = 0.75s + 0.786s | Created = May/2022 - September/2022
- "POI" (Point of interest) = 1.02500 | Psychologically important resistance level
- "SUPPLY ZONE" = | Monthly chart
- "ICHIMOKU CLOUD" = Cloud resistance | Weekly chart + Conversion line | Monthly chart
- "VP" (Volume Profile) = Strong Volume | Much Past Traded Volume = Major Resistance.
X. | POI ZONE | 1.03736 - 1.03936 | Points
RESISTANCE - CHARACTERISTICS
- "FIB" (Fibonacci) = 0.88s | Originated = May/2022 - September/2022
- "POI" (Point of interest) = 1,04000 | Psychologically important resistance
- "SUPPLY ZONES" = | Daily + Weekly chart
- "VP" (Volume Profile) = Strongest volume | Highest past traded volume concentration = Very large resistance.
- "MA" (Simple Moving Average) = 50-length | monthly chart.
- "ICHIMOKU CLOUD" = no resistance in HTF (Higher time frame) time levels T / W / M
4th | TARGET ZONE | 1.04839 - 1.05398 | points
RESISTANCE PROPERTIES
- "FIB" (Fibonacci) = 0.618s + 0.65s | Created March/2021 - September/2022
- "POI" (Point of interest) = 1.05000 | Psychologically important resistance level
- "MA" (Simple Moving Average) = 100-length | weekly chart + 50-length | monthly chart
- SUPPLY ZONES" = daily + weekly + monthly chart
- "VP" (Volume Profile) = GAP in the zone | Not much past traded volume = little resistance to the upside.
CONCLUSION
You now know what the scenario for "EUR/CHF" could look like.
The following conditions must be met:
- DXY (USD) starts to CORRECT = pressure way fall for the EUR -> EUR more dominant than CHF
- BREAKOUT of the H&S pattern
-> OVERCOME the resistance line + successful back-test
= transformation into a support line.
- DEVELOPMENT of the individual ZONES and their relevant resistance properties.
PS:
+ I have once taken the liberty to draw a possible "course", so you can see how it could run.
+ Many of the indicators described are not visible in the chart, so that a clear view remains.
-> Feel free to discuss it in the comments and share our perspectives, I'd be "burning" to hear your take on the whole thing.
If this idea and explanation has added value to you, I would be very happy to receive a review of it.
Thank you and happy trading!
For anyone who would still enjoy the other HTF and want to hide all the "noise" - following the weekly and monthly chart.
Trade active
We have "INTRADAY" successfully broken through and tested the resistance line.- for a full confirmation, we still have to wait for the next daily closes.
As written in the analysis:
- Breakout (Day) + Backtest (Day) and then the rally can start.
For any risk-taker and good position management, can go in with little risk.
If you look at the other FX pairs, all are strongly influenced by the movements of the DXY. The EUR/CHF doesn't seem to care, considering the lack of correlation.
Trade active
TARGET ZONE No.2 was successfully reached and processed. - Took a little while ... the wait paid off!
Reminder:
Now everyone should have taken partial profits at the latest!
Trade closed: target reached
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