The EURCHF pair is again presenting us a wonderful buying opportunity in the short term. There is a channel forming on the 4 hour chart, and the pair is heading towards the channel support region. The highlighted channel support might produce a bounce in the pair. So, if the pair trades closer to the support level and forms a bullish divergence, then we can jump into a buy trade.
Alternatively, there is a down-move trend line forming on the hourly chart. There is also a resistance at around 1.2185 level, as can be seen in the chart below. If the pair manages to break the trend line and resistance, and settle above the resistance zone, then also we can enter into a buy trade.
Initial target should be around 1.2240 level, and final target could be around the channel resistance zone. Stop should be placed below channel support in the first scenario, and below the broken trend line and resistance in the second scenario.
Reviewing yesterday’s events and trades
The US dollar registered a heavy decline yesterday after the release of the FOMC meeting minutes. The minutes were more dovish than expectations, which ignited a selling pressure on the US dollar. All major pairs such as EURUSD, GBPUSD and AUDUSD surged higher to register weekly and monthly highs. The AUDUSD pair outperformed as the Australia’s employment report was also published, which registered impressive gains. AUDUSD traded above the 0.9400 resistance zone taking NZDUSD along.
Fundamental Outlook for the day
Today is an important day as Bank of England (BOE) interest rate decision is scheduled later during the EU session. BOE is expected to keep the interest rates at 0.5% with no change in asset purchases. Let’s see how GBPUSD pair reacts to the outcome of this event. Later, during the NY session US initial jobless claims, import price index and Federal budget balance data will be published. These events might affect the US dollar in the sessions to follow. Moreover, Chinese inflation data will also be released in the next Asian session to ignite more volatility in the market.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, USDJPY, USDCAD and EURGBP.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
