FxWirePro: Wait to re-enter long positions in EUR/CHF

In mid-June this year, in an article named, “FxWirePro: Buy euro against franc targeting 1.12”, available at http://www.econotimes.com/ , we suggested buying the euro against franc at the ten current rate of 1.089, with a target around 1.12 area and with a stop loss around 1.06. Here are some key notes from that piece,

“The geopolitical risks that have surrounded the single currency have now diminished significantly with a decisive victory by Emmanuel Macron in the French Election.

Moreover, the recent economic releases from the continent suggest that the economy has started gathering pace. Several economic dockets released today, support this theory. Data showed that French wage growth accelerates at the best pace in three years. European new car sales approach pre-financial crisis high. Labor costs in Spain have stopped shrinking. While the Swiss economy is not doing bad either with its trade balance at 11 percent of GDP and the unemployment rate at 3.3 percent, the euro has a lot to gain against the franc, when we consider the risk aversion flight during the debt crisis of 2011/12. Moreover, the market is going to pay attention to the fact that the Swiss National Bank (SNB) intends to weaken franc and is likely to be the last man standing on the easing front.

We at FxWirePro believe that the euro could gain towards 1.12 against the franc, however, one must note that this pair is a very slow moving one. Stop loss should be kept around 1.06 area.”

After euro reached our target of 1.12 against the franc, we extended the target to 1.137, which was reached last week and we recommended closing positions in the tune of 65-75 percent and keep the rest to gain a bit more from the momentum.

Last Friday, the euro reached a high of 1.154 against the franc and has steadily and a bit sharply declined since then. It is currently trading at 1.132 against the franc. We hope that our readers have closed rest of the position as it is clear that the current bullish euphoria is over. If not, they are recommended to do so.

However, one must note that we do not think the bull trend in EUR/CHF is over. It is just that it is better to wait at the sideline for the right opportunity and let the current downside correction to be over.