The reversal higher through the Falling Wedge on the daily EUR/CHF has many traders thinking of a more pronounced and potential trend reversal but even though there was a pattern reversal, do not assume a trend reversal says the Autochartist Forecast area.
The grey shaded area on the chart shows where selling resistance could build. Normally a break higher through the 34 period EMA high would open the door to a Wave Reversal entry however from a technical standpoint while this may be a little too aggressive considering the fundamental picture.
The fact is that a broken downtrend is not necessarily and automatically an UPTREND which is often a mistake traders will make. This trend could be transitioning and as long as prices are finding resistance within the Forecast, time and experience has taught me not to ignore these Autochartist Forecast areas.
Chart pattern alert courtesy of Autochartist.
Another – and more aggressive approach – would be to consider a short sell within this resistance with the expectation that the euro (given the current circumstances) will continue to lose ground against the franc – which continues to be a safe haven. This is not an environment where I want to bet on euro strength and franc weakness longer-term.