Global markets are reeling this morning after the US president trumped his previously announced tariffs on $50bn worth of Chinese imports with the threat of another $200bn worth should the Chinese retaliate with penalties of their own on his initial tariffs. The heightened fear of a full-blown trade war has slammed into equities and EM currencies with the usual safe-haven assets – gold, bonds and the Swiss franc – gaining.
Short term
Trade view / 22 July 2016 at 10:13 GMT

Volatile trading in EURCHF is attracting sellers

Director / PIA-First Limited
United Kingdom
Instrument: EURCHF
Price target:
Market price:

Recent weeks have seen EURCHF establish a key trading range, on which we look to capitalise. With levels above 1.0900 continuing to find sellers, we look to set shorts on a rally towards this pivotal level.

WeeklyWe continue to trade between key support and resistance of 1.0665 and 1.1120 respectively, with dips towards and into the Ichimoku Cloud being rejected. Long- and medium-term bias is neutral.

DailySince early June, price action has been broadly confined between 1.0800 and 1.0900. Fundamentally, the coming days fail to present us with any clear catalyst to drive the pair out of this range. There is also no technical reason to suggest a change in this trend, and we expect trading to remain confined between this range over the coming days.

Yesterday saw a rally through 1.0900 once again rejected, resulting in the market posting mixed daily results for the last five days. Trendline resistance is currently located at 1.0907, which coincides with our bespoke support level. Therefore, we are looking to sell into rallies towards here.

The target for this trade will be the previously mentioned support level of 1.0800, and by placing the stop above previous resistance of 1.0945, this trade offers reward/ risk of 2:1.

Management and risk description

A move down to 1.0840 and we would look to move the stop to entry.

If the trade has not triggered by Monday’s close, we look to cancel the trade idea. 


Entry: 1.0900.

Stop: 1.0950.

Target: 1.0800.

Time horizon: 1 week.

EURCHF weekly 
Source: Saxo Bank

EURCHF daily 
Source: Saxo Bank

— Edited by D. Deacon

Non-independent investment research disclaimer applies. Read more


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