Weekly
Last Candlesticks pattern: Hammer
Time of formation: 08 Aug 2011
Trend bias: Down
Daily
Last Candlesticks pattern: Morning star
Time of formation: 3 May 2013
Trend bias: Sideways
EUR/CHF – 1.2363
Despite rising to 1.2466 last week, the subsequent retreat has deferred our bullishness and consolidation below said resistance is in store, however, reckon downside would be limited to 1.2300 and reckon support at 1.2278 would hold, bring another rise later, above 1.2405-10 would suggest the pullback from1.2466 has ended, then retest of this level would follow. Looking ahead, a rise above this level would add credence to our view that the decline from 1.2650 has ended at 1.2217 late last month and upside bias remains for further gain to 1.2487 resistance, break there would extend gain to 1.2540-50 and possibly test of strong resistance at 1.2573. Having said that, a daily close above this level is needed to retain bullishness and bring resumption of upmove for gian to 1.2600 and then retest of this year's high of 1.2650.
On the downside, below 1.2300 would risk test of said support at 1.2278 but only break there would abort and suggest the rebound from 1.2217 has ended instead and risk another fall to this level, having said that, downside should be limited to support at 1.2197 and price should stay well 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 1.2250.
On the weekly chart, euro's retreat after last week's rise to 1.2466 formed a candlestick with long upper shadow, dampening our bullishness and consolidation below this level would be seen, however, reckon the Ichimoku cloud (now at 1.2284-94) would limit downside and bring another rise later, above the Tenkan-Sen (now at 1.2435) would bring retest of 1.2466 but break there is needed to add credence to our view that the fall from 1.2650 has possibly ended at 1.2217 and test of 1.2487 resistance would follow. 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 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 the Ichimoku cloud (now at 1.2284-94) would risk test of support at 1.2278 but only a weekly close below this support would abort and suggest the rebound from 1.2217 has ended instead and risk weakness to this support, however, still reckon downside would be limited to previous support at 1.2121 and the SNB's floor at 1.2000 should remain intact, bring another strong rebound later.
IMOH, Clement I.
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