The EURCHF pair is trading a touch lower Intraday after the inflation data for the Euro zone. It looks like the pair is forming a head and shoulders pattern. If this turns out correct, then the pair might fall a bit from the current levels, as can be seen in the chart shown below. This correction will present us a nice buy opportunity in the medium term. So, we should consider buy setups after a small correction in the pair.
There is a channel forming on the 4 hour chart, as highlighted in the chart shown below. There is also a support seen at around the 1.2150/60 levels, which also coincide with the channel support. If the pair falls around the channel support region, stops around the channel trend line, and forms a divergence, then we can jump into a buy trade.
Initial target should be around 1.2210 level, and final target could be around 1.2240 level. Stop should be placed below the 1.2120 level.
Reviewing yesterday’s events and trades
Yesterday in the Europeans session, the Euro zone inflation data was released for the Euro zone. The outcome missed the expectations and registered a decline to 0.5% from 0.7%. This is a preliminary reading. The reaction from the EURUSD was strange, as the pair dived early, but later recovered all lost ground to trade higher, and even traded just above the 1.3800 level. The US dollar was seen trading lower yesterday, as some other majors such as GBPUSD also traded higher in the NY session.
Fundamental Outlook for the day
Today, the US ISM manufacturing index will be released in the NY session. The market is expecting an improvement from the previous reading. If the outcome does not disappoint, then one can witness some gains in the US dollar, and if the manufacturing index slides, then the US dollar sellers might also try to push the pair lower. In the next Asian session, the Australia’s building approvals data will be published, which is expected to decline. So, keep an eye on these events and position your trades accordingly.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: NZDUSD, AUDUSD, GBPUSD, EURCAD, USDJPY and EURAUD.
Get it HERE: Vladimir’s Markets Forecast
Have a great week friends. Happy trading!
