EURCHF Choose to Go South
In this piece, we will describe the situation on the EURCHF, where a week ago, we were waiting for the buy signal. We did not say that the buy signal is right there, right now but we acknowledged such a possibility: “As long as we stay below the Fibo mentioned above, the sentiment is still negative but the breakout of this line will give us a proper buy signal. “ This is what we wrote back then.
Patience is the virtue of every trader. Usually, you need to wait for the proper signal. In this case, it did not happen and the price went lower. Thursday was decisive here. The price broke the lower line of the flag and the short-term horizontal support. That gave the boost to the sellers and cleared the way south. Monday brings us a breakout of the green line connecting the bottom of the head and the right shoulder. That represents the total cancellation of the positive sentiment and opens us away towards new yearly lows.
The sell signal will be canceled, when the price will break the black line. That resistance connects the most important lower highs since April. Chances for that are rather limited.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis