This week, we will start with a very nice, technical setup on the EUR/CHF. This is an occasion on the weekly chart, so something for the patient, long-term, position investors. Well, I am aware of the fact that most of you, who read this right now are short-term traders, but I hope that you will at least look at this setup.
In this case, we do have in play one of the most important principles of the price action – broken resistance is being tested as support (green area). What is more, we do have another principle here, so double testing (this area was already tested in September). In addition to this, there is also a nice candlestick, so a formation from the last week is a pin bar. If we get all this together, we do have a positive sentiment and chances for a major bullish reversal.
The buy signal is present here as long as we stay above the green area. The target is on the yellow resistance, which gives a desirable risk to reward ratio. If you are not convinced about the buy signal right now, you can wait for the breakout of the blue down trendline first. This is the line that connects the lower highs since the July and the breakout of that line should definitely be considered as an additional bullish factor.
EUR/CHF, Weekly Chart