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Technical Analysis: Currencies
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EUR/CHF
Tue, Sep 2 2008, 09:13 GMT
by Nicole Elliott
Comment: Little to add since we last wrote this one up in mid-May. The cross continues to trade just below the pivotal area around 1.6300 and has formed a potential large ‘double top’ since then. Prices have struggled below the Ichimoku ‘cloud’ for months and are being dragged down by it this month. Note how it thickens by mid-September, probably adding to downside pressure and momentum should turn bearish on a daily close below 1.6100. The question then will be whether the next drop will be as dramatic as last March’s one. Possibly because one-month at-the-money implied volatility should hold above 4.50% and looks set to push up to 6.50%. Realistically prepare for a very sudden collapse to 1.5800 followed by a steady long term decline to 1.5000.
Strategy: Sell at 1.6100, adding to 1.6250; stop above 1.6375. Add to shorts on a daily close below 1.6100 and again on a weekly close below 1.6000 for 1.5800 short term and then a lot more.
Published on Tue, Sep 2 2008, 09:15 GMT
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