Trade Recommendation: CHF/INR

The Swiss Franc/Indian Rupee (CHF/INR) pair launched its uptrend in September 2008 when it took out resistance of 40. The price action activated the double bottom reversal pattern on the weekly chart. This attracted breakout traders and trend followers who helped propel the market to as high as 82.594 in January 2015. In about six and a half years, the Swiss Franc grew by over 106% against the Indian Rupee.

At this price level, the market was in overbought territory. Those who followed the trend started to take profits. The heavy selling pressure drove the pair to as low as 61.182 (A-wave) in March 2015. Even though the pair bounced, it created a lower high of 71.893 (B-wave) in August 2015.

The lower high should have killed the market’s momentum but CHF/INR is resilient. It responded by creating a bullish higher low setup of 63.655 (C-wave) in April 2017. The entry of bottom fishers at this level ignited a rally to another lower high of 69.793 (D-wave) in March 2018. At this point, it is apparent that the pair is consolidating for the next move up.

Technical analysis reveals that the Swiss Franc/Indian Rupee pair appears to be creating a symmetrical triangle pattern on the monthly chart. The formation points to the possibility that the market is in the latter stages of wave 4. If that’s the case, breakout from this pattern would spark the fifth and final wave up.

The strategy is to bottom fish the market and buy as close to support of 65.5. As long as CHF/INR respects the support, it will have all the momentum it needs to move to our target of 82. Sell immediately because at that point, the market will most likely turn bearish.

The process may take more than six months.

Monthly Chart of CHF/INR

As of this writing, the Swiss Franc/Indian Rupee pair is trading at 68.106.

Summary of Strategy

Buy: Buy on dips as close to 65.5 as possible.

Target: 82

Stop: 63

 

Featured image courtesy of Shutterstock.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.