Daily Analysis: Observing EURCHF for a sell opportunity

Today we have an interesting opportunity for EURCHF, as the pair is heading towards a major resistance level. There is also a down-move trend line as plotted on the 4 hour chart shown below, which is also coinciding with the resistance area at around 1.2360/70 level. So, I think we should plan for a sell opportunity from this particular resistance zone.

Looking at the 1 hour chart of EURCHF, the pair is starting to form a bearish divergence. So, if the pair moves higher, makes a stop at around the 1.2360/70 resistance area, forms bearish divergence and creates a bearish candle pattern on the 1 hour chart, then we will jump into a sell trade. Alternatively, if the pair does not move higher, then we will re-analyze the situation later, and try not to force things, as we are getting close to the weekend.

Initial target should be around the up-move trend line as plotted on the hourly chart below. We can also look to take profit at around 4 hours 20 moving average. Stop should be placed well above the resistance zone.

Reviewing yesterday’s events and trades
A lot of fundamental data was released yesterday for the Euro area, UK and US. During the European session, French, German, Italian and Euro area GDP flash estimate data was released. Euro area GDP grown by 0.1%, missing the expectations of 0.2%. French GDP data was also disappointing as it declined to -0.1% from 0.5%. Overall, the growth figures were disappointing for the Euro area. Later, UK retail sales data was released, which registered a decline in sales from 0.6% to -0.7% in October. In the NY session, US initial jobless claims data was published, which registered a rise in the jobless claims to 339K. The US dollar was broadly lower after the data release as the EURUSD and GBPUSD traded higher.

Fundamental Outlook for the day
Today, in the European session, Euro area inflation data was released. The market was expecting the year-over-year inflation to remain at 0.7% and drop to -0.1% October. The outcome was as expected. Later in the day, we have US industrial production data lined up, which is expected to register a decline from 0.6% to 0.2%. Furthermore, NY empire state manufacturing index figure will also be released for the US. It is expected to rise from 1.52 to 5.00. Today is Friday and we are almost close to the weekend. So, I would advise not to get into a trade unnecessarily.

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

Have a great weekend friends. Happy trading!