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 / 21 June 2016 at 7:29 GMT

EURCHF wedge formation keeps downside focus

Analyst / PIA First
United Kingdom

EURCHF – We have seen a recovery this week in EURCHF but there is no technical reason for the selloff not to resume. A solid upside barrier should be the Marabuzo level from the week starting June 6. This is located at 1.0957.

An AB=CD formation is located at 1.0738, with the 127.2% extension located close to the previous swing low at 1.0703. We look for this area to be the next downside focus. 

The last move lower was impulsive and we could see a push to the 161.8% extension at 1.0568 (from 1.1199-1.0809), lining up with the trend of higher lows from April and July 2015. 

Medium-term bias remains bearish
Source: Saxo Bank 

The intraday chart highlights the move higher being mixed and volatile, which is common in corrective sequences. This is forming an ascending wedge pattern that has an eventual bias to break to the downside.

Our bespoke resistance is seen at 1.0920, close to the previous swing high at 1.0921. Placing a stop above the aforementioned Marabuzo, this offer a good medium-term risk/reward trade. 

Intraday - Corrective cycle
 Source: Saxo Bank

A clear break of 1.0866 and the move lower could already be underway.  The only concern with this view is the possibility for Swiss National Bank intervention. 

Management and risk description


Entry: selling close to 1.0920.

Stop: 1.0965.

Target: 1.0738 and 1.0703.

Time horizon: 5-7 sessions.

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more


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