Buying EUR/CHF at the 200 SMA
EUR/CHF retraced lower yesterday, but it seems to have ended at the 200 SMA today
EUR/CHF has been bullish since July. Safe haven currencies have also been bullish, but despite that, EUR/CHF has been increasing since the Euro has been even stronger then safe havens, especially after EUR/USD broke above the major resistance level at 1.20.
Buyers have been having trouble making new highs since late November, but the lows ave been getting higher, which is forming an ascending triangle on the H4 chart, as shown above. So, the pressure is on the upside and we decided to open a buy forex signal here earlier today.
At the end of December, we saw a decent pullback lower ahead of the new year, but the ascending trend-line held as support and rejected the price. Yesterday, we saw another pullback lower, but the decline seemed weaker and the 200 SMA (purple) was holding as support.
This moving average has been acting as support and resistance before, so it did that again and we decided to go long, buying above it, with a target below the resistance zone. Now the price has bounced around 15 pips higher off the 200 SMA, so the reversal seems to be underway, which puts our trade in a good position.
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