Cautious Longs with potential for further weakness

16 Nis

I’m currently looking for long entries on EURCHF.

That being said, these are cautious longs with the anticipation of further strength in the Swiss Frank.

I’m expecting further gains in the Swiss currency due to its safe haven appeal and the lack of room for SNB intervention; either by way of direct market intervention or rate reductions.

My personal view is that the SNB will be reluctant to intervene in its currencies rapid appreciation. I have reached this conclusion for many factors; most significant of which are fears of reprisal from Trump and his tariff charges, but also for concerns closer to home.. I’m not sure if the SNB can afford the risks associated with inflating its balance sheet during a time in which the bank has very little room for interest rate reductions.

As long as the markets lack direction from Trump, capital will flow into safe haven assets.

The red lines are a historic falling wedge, formed back in 2011. The black are self explanatory from the time frame shown.

The rapid depreciation in this pair isn’t (in my opinion) related to euro weakness, but rather the aforementioned. Given the structure of the market, rapid depreciation of the pair, divergence between price action and indicators and the fact that we’re floating around an important area of support, I feel a temporary reversal may be on the horizon.

I’m expecting a test of all-time lows for this pair at circa 0.92. I currently have an active trade at 0.9232 and plan to scale in positions if the price weakens further with my ares of interest highlighted by the grey boxes.

19 Nis

İşlem aktif

The blue arrow shows an abnormally large spike in volume, one not seen in long time… over 15 years. We also saw a muted response in price action which shows market indecision. This obviously took place on a bank holiday which is extremely unusual. At the same time, market sentiment for short positions jumped from 14% on Thursday, to 26% on Friday.

I wouldn’t be surprised if we saw a big increase in volatility next week. I’ve set my tp to break even with a view to entering lower if we get a test of all time lows.

What are your thoughts on this?

22 Nis

İşlem kapandı: hedefe ulaştı

I’ve potentially closed my position early but I can see a possibility for a continuation in strength for the franc. As a result I’ve closed my position at 0.9345 but will enter again if we have a move to the downside.

Profit - 113 pips

5 gün önce

Not

Pending long order filled at 0.9315.

I still feel the Swiss national bank has very little room to correct the strengthening of its franc if tariff tensions don’t resolve. It is for this reason that I expect a potential for further gains in the Swiss currency, even despite the recent positive euro zone figures. How much more does the franc have to gain? …I’m not too sure, but given its strength over the past few months; I can see an increase chance in central bank intervention if it’s gains persist. Especially if the current tariff situation continues to improve.

5 gün önce

Not

Trade closed at 0.9375

My tp was 0.94 and although I’ll get positive roll over payments for holding this long over the weekend, I feel there’s too much unnecessary risk so I’ve closed the trade manually for 60 pips.

Total profit - 173 pips