John J Hardy
John Hardy, head of fx strategy at Saxo Bank provides a technical analysis of the following currency pairs: USDJPY, AUDUSD, EURUSD, EURGBP, AUDJPY, AUDCHF, EURCHF, NZDUSD and AUDNZD.
Short term
Trade view / 09 June 2016 at 9:54 GMT

Decision time for EURCHF as triangle base draws nearer

Director / PIA First
United Kingdom


The weekly chart shows the pair in a bullish move higher since the substantial January 2015 selloff. More recently however we have seen lower highs be posted and the pair currently trades in a symmetrical triangle pattern; the base of which we are fast approaching.

1.0900 has been a pivotal level over the last year, and with the triangle-base trendline offering support around 1.0910, we remain cautious on extended downside potential.


The consolidation period from mid-March through to early June has seen the pair form a bearish head and shoulders formation. Tuesday saw the formation become completed after a downside breakout and has seen an aggressive selloff since, with the formation’s measured move target of 1.0915 being met this morning. We could now see the drive stall and a possible correction in the overextended move lower.

However, the downward move is currently showing no signs of slowing, with the pair currently breaking through the Ichimoku Cloud base accompanied by the lagging line also breaking through, alternatively presenting us with a bearish sell signal.

As mentioned earlier, 1.0900 has been a pivotal level over the last year or so. The daily symmetrical triangle base currently comes in at around 1.0894. If prices manage to hold above here, with signs of bullish divergence, a correction is possible. However, a break below this level and we would expect to see extended losses towards the triangle base at 1.0809.

This presents us with two possible options to trade. Either to buy into the dip or to sell a clear break of the triangle base. Each trade offers a 2:1 risk/reward potential

Management and risk description


Entry: Buy EURCHF at 1.0910
           Sell EURCHF on a break of 1.0890

Stop: 1.0890 on the buy trade
          1.0930 on the sell trade

Target: 1.0950 on the buy trade
     1.0810 on the sell trade

Time horizon: 3-10 days

 Source: Saxo Bank. Create your own charts with SaxoTrader click here to learn more

  Source: Saxo Bank

 Source: Saxo Bank 

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
09 June
tcat tcat
thanks I really like this 2 way view.
09 June
Raj-900 Raj-900
Hi Steve,
Is this trade still valid for the next 3 to 10 days? as buy hit the stop loss & the sell trade also running in the opposite direction.
10 June
Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
Hi Raj. The buy trade was stopped out and the sell trade is still valid. Thanks
10 June
Raj-900 Raj-900
Hi Steve,
Thanks for the info


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