- The euro initially rallied against the Swiss franc but gave back gains to show signs of negativity.
- That being said, there is plenty of support underneath near the 0.95 handle, which is a large, round, psychologically significant figure.
- We also have the 50 Day EMA reaching that area as well, and therefore I think there are plenty of reasons to believe that it will continue to be an area that a lot of people pay close attention to.
- Because of this, I think we have to recognize the fact that although the pair looked a little bit soft as of late, the reality is that a couple of weeks ago, we had seen a massive amount of buying.
Technical Analysis
The technical analysis for this EUR/CHF pair is fairly choppy and noisy as per usual, but we most certainly seen a market that is trying to form some type of uptrend. This would make sense, due to the fact that the German bond yields are climbing, while the Swiss have done everything to keep theirs down that they possibly could. In fact, they have cut rates recently again, and therefore it suggests that the Swiss are going to remain very loose with their monetary policy as far as we can see.
If we were to break down below the 50 Day EMA, then it’s possible that we could see a plunge toward the 0.9350 level, an area that previously had been support, and therefore I think we would “reset the battle” at that region. Anything below there then has this pair plunging to the 0.9250 level. That being said, this much more likely that we bounce fairly soon, and perhaps even reach toward the 0.9650 level. Anything above that then gets the euro really taking off to the upside, but we would need more of a “risk on attitude” around the markets overall to get things going.
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