today, I am going to talk about EUR/CHF .
What usually happens in such rotation is that BIG institutional traders are building up their huge trading positions.
They do it in a rotation so they are not recognized and their intentions stay hidden.
What those BIG guys do next is they start a trend. This is where their trades start making money.
In this case, it was a downtrend (a sell-off).
This tells us that the BIG guys who were building up their trading positions were strong Sellers.
What the Tells Us?
What we have now is this information: There were strong institutional Sellers building up their Shorts in a heavy area starting around 1.0876.
This is an useful piece of information we can work with.
When the price makes it back into this heavy area, then those strong Sellers will most likely want to defend this zone. It is clearly important for them because they placed a lot of their Short trades there.
So, what they will do when the price reaches the 1.0876 area? They will start quitting their Long trades. To quit a Long trade, they will need to Sell, and a Market Sell Order will help to push the price downwards again.
Both these factors (Sellers defending, and Buyers getting rid of Longs) should work together around the 1.0876 area and make this zone a strong Resistance.
I hope you guys liked my analysis! Let me know what you think in the comments below!
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