Good day. This is Francis Hunt, the Market Sniper for CantosCharts and we're going to talk about currencies today.

Quite a while back, last year we mentioned that we expected the euro to fall on an inverted Hunt volatility funnel against the Swiss franc. It's become a very topical issue at the moment. With the Deutschmark no longer existing, many Germans we believe are buying gold and the Swiss franc. And the Swiss National Bank made the controversial decision of buying euros and selling their own currency in an attempt to defend their currency.

You might notice that I've drawn a chart and I've drawn a few pivot lines around which I suspect activity may have been involved. Here I've highlighted one and I'm just going to go in across a tighter timeframe to show you. We're on a daily chart and now we're dropping down to a four-hourly. That is the circled area.

A great trade opportunity. We're talking about a currency in my view, that had to lose strength relative to the Swiss franc and we've got an inverted set-up with a nice big amplitude, projecting a great big target. So it stops at the red line, entry on the orange line and boom! you've got inter-day. You can see from my platform, where I managed to get tucked in short. I wasn't even present at the time and the target was covered within two candles. Complete capitulation straight down, I believe because there was artificial support in the market.

However, straightaway when there's a big move, you can expect them to come back. It got brought all the way back up to the level. This is the value of having a target. You would have been as sick as a canary if you'd been in the money and gone all the way back up. So having got out, I was in a position to go short again as that support was withdrawn.

Looking at a slightly tighter timeframe, looking at the five minutes you can see we get lots of the small set-ups with a target. This is when the euro is bouncing back, the target got hit. Note how that line became a key line around which the next pattern sets up around, pivoting around it. Once again all key levels of significance don't only form a support and resistance. With a smaller pattern, the same pattern, but just on a one-minute chart, you can see how it sets up, you can see where entry would be at the third high point and your money management stop and boom! off it goes to the target because we're now trading the euro longer versus the Swiss franc.

Another opportunity, pretty innocuous looking chart to many, but once you get used to looking for these things, flip it over and you might start seeing things. Have we got a set-up here? Well, we'll turn it back over now that we've drawn those lines in. From looking at it upside down, you can see that we do in fact have an inverted Hunt volatility funnel. Going back to the inverted scenario, let's have a look at some of the detail. In the orange circle, we've already had a set-up with a target that was missed and that set up are too high on the bigger pattern.

So we started to look at patterns within patterns. This gives you an incredibly high probability opportunity for trading your currency. Look at that blue circle there. We zoomed in into it and within that on a very tight timeframe we've even got a small set-up. So this allows you to minimise the potential loss or to trade slightly larger for the same money management loss level. So we're able to get long over here but short over there.

Going back to the chart the right way up, that means you're looking for it to sell short. Where would the support and resistance come? We look at the key levels. There's likely to be a bounce there and the bounce occurred due to the key levels. After that bounce, further capitulation towards the target. There's our blue circled area and there was where the second [thought] in the breakout occurred, at the key significant levels.

This is the breakout, the anatomy of a breakout. Remember it doesn't always go straight in your favour straightaway. You might get the tippy-toe fake and then break, that trails below the level, pulls back initially. You often get the second chance where the final bulls still come rushing in. It exhausts as it did on the blue level and then you get the capitulation. That's the fun bit, away you go. Weak buying overcome as the level starts to drop a little bit lower, some buyers coming in possibly a bit too soon and then the final counterattack phase at which point we've covered our target. This was the GBP versus the CAD, that's going off falling shortly.

That was Francis Hunt, the Market Sniper. You can follow me on Twitter under the Market Sniper for CantosCharts. Goodbye.