- The euro has spiked against the Swiss franc during the early hours on Monday, and I’m starting to question whether or not we are going to have a bit of a “double bottom” come into the picture and lift the market.
- If we continue to rally from here, then the market could go looking to the 0.95 CHF level, and then possibly the 50-Day EMA which is near the 0.9540 level.
Keep in mind that the EUR/CHF pair is highly sensitive to risk appetite, as the Swiss franc of course is considered to be a major safety currency. The market is likely to continue to be noisy to say the least, and it is worth noting that this pair does tend to get erratic at times, and then spend a couple of weeks doing very little afterwards. There is a massive amount of inflows in this currency pair, depending on how the European Union is feeling at the moment. After all, Europeans will quite often throw their money into Swiss assets for safety when we start to see struggles in the European Union. Alternatively, if people start to feel little bit better about the overall attitude of markets, they will pull money out of Switzerland and throw it into the European Union.
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Technical Analysis
At this point in time, we have to question whether or not we are in the midst of forming some type of “double bottom.” The market currently looks as if it is trying to find its floor, and if and when it does, the 50-Day EMA is the next target. Anything above there then opens up the possibility of a bigger move, perhaps reaching toward the 0.9750 region. With this being the case, the market is likely to continue to see a lot of choppiness, but that’s normal for this pair.
On the other hand, if we were to break down below the 0.93 level, then we could see a complete flush and perhaps an opening of a massive “trapdoor” in this market, perhaps sending the euro plunging down to the 0.90 level, which would almost certainly be a sign that the risk appetite around the world is starting to fall as well.
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