It has been a hysterical past couple of days in the markets, starting with a 9% drop in the Chinese markets, then a 3% drop in US equities, and in the forex markets we’re seeing the Yen rise on “carry trade liquidation” fears. Now that the panic seems to have subsided, do we jump back in long some of our favorite carry trades? Well, maybe not the yen, but EUR/CHF looks nice!
On the chart, the pair is currently trading near 1.6100 where it has found support before. The stochastics are looking oversold, so it may be a good time to jump back into this uptrend. The current market price is around 1.6120, so we will wait until the price drops back down to 1.6100 before jumping back in.
Long EUR/CHF at 1.6100, stop at 1.6070, pt1 at 1.6150, pt2 at 1.6200
Remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly.