Daily Analysis: Eyeing EURCHF to form a bottom for a buy opportunity

The EURCHF pair is trading lower against the greenback, as the CHF currency seems to be gaining some bids in the short term. However, I think the EURCHF is coming closer to a very critical support level, as can be seen in the daily chart shown below. The pair might bounce from the current levels in the short term. So, I think we should be looking for buying opportunities.

There is some weakness noted on the 4 hour chart, and a divergence forming as well. Looking at the hourly chart, there is a support at around the 1.2160 level. If the pair pushes a bit lower from the current levels, creates a double bottom, and forms a bullish divergence, then we can jump into a buy trade.

Alternatively, there is a down-move trend line waiting for the pair. If the pair manages to break this trend line along with the resistance, as shown below, then we can enter into a buy trade once the pair re-tests the broken trend line and support zone.

Initial target should be around the 1.2220 level, and final target could be around the 1.2290 level. Stop should be placed below the 1.2120 level.

Reviewing yesterday’s events and trades
Yesterday, there were some swing moves as expected in the market. The tensions from the Ukraine escalated. The pairs like EURUSD and GBPUSD took a hit in the European session. The data released for the Euro zone in the European session was more on the positive side, except for that fact that the Spanish GDP figures missed the expectations. Later in the NY session, the US core durable goods orders surprised to the upside with a gain of around 1.1%. However, the US dollar was seen losing some ground later during the NY session, as the pairs like EURUSD and GBPUSD recovered some of the lost ground.

Fundamental Outlook for the day
Today, in the European session, the Euro zone inflation data will be released. This release is very important, in my opinion, in the short term. I expect some moves for the Euro around the time of release. Later, during the NY session, the Canadian and US GDP data will be released. There are some other economic releases scheduled as well, including the Chicago PMI, Michigan consumer sentiment and pending home sales data. Remember, we also have a couple of speeches lined up. The BOE Governor Mark Carney and the Fed member Stein will be speaking later during the day.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: USDJPY, NZDUSD, GOLD and OIL.
Get it HERE: Vladimir’s Markets Forecast

Have a great weekend friends. Happy trading!