- Last Candlesticks pattern: Hammer
- Time of formation: 08 Aug 2011
- Trend bias: Down
- Last Candlesticks pattern: Morning star
- Time of formation: 3 May 2013
- Trend bias: Sideways
EUR/CHF – 1.2357
Despite last week's rebound to 1.2415, as the single currency has retreated after faltering below the resistance at 1.2435, suggesting further consolidation would be seen, however, still reckon 1.2278 minor support would limit downside and bring another rebound later, above last week's high of 1.2415 would bring test of said resistance at 1.2435 but only a daily close above 1.2466-87 resistance would add credence to our view that the decline from 1.2650 has ended at 1.2217 back in June, bring subsequent rise to 1.2540-50 and possibly test of strong resistance at 1.2573. Looking ahead, euro needs to penetrate this resistance to encourage for a resumption of early upmove for an eventual retest of this year's high of 1.2650.
On the downside, expect pullback to be limited to 1.2300 and said minor support at 1.2278 should hold, bring such a rebound to aforesaid upside targets. Only below support at 1.2266 would risk test of previous support at 1.2217 but break there is needed to abort and suggest the fall from 1.2650 top is still in progress and extend weakness to support at 1.2197, however, as broad outlook is still consolidative, downside should be limited to 1.2150 and price should stay above indicated key support at 1.2121, bring another strong rebound later.
Recommendation: Hold long entered at 1.2350 for 1.2550 with stop below 1.2265.
On the weekly chart, failure to penetrate indicated resistance at 1.2435 and euro's retreat from 1.2415 has retained our view that further consolidation is in store, however, still reckon indicated support at 1.2266 would limit downside, bring another rebound later. Above said resistance at 1.2435 would bring test of 1.2466-87 resistance area, however, a sustained breach above there is needed to add credence to our view that the fall from 1.2650 has ended at 1.2217. Having said that, a weekly close above there is needed to confirm and bring further gain to next resistance at 1.2573, once this level is penetrated, this would retain our bullishness for another test of 1.2650-60 (said resistance and 38.2% Fibonacci retracement of 1.6828-1.0075). Looking ahead, only above there would confirm resumption of the upmove from 1.0075 (record low formed in 2011) to 1.2750-60 and possibly towards 1.2850 but price should falter below pevious resistance at 1.2965, the psychological resistance at 1.3000 should remain intact.
On the downside, below said support at 1.2266 would risk another fall to 1.2217, only break of this support would abort and signal the fall from 1.2650 is still in progress and extend weakness to 1.2170-75 but reckon previous support at 1.2121 would limit downside and the SNB's floor at 1.2000 should remain intact, bring another strong rebound later.