Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

EUR/CHF: A Pocket Of Stability

Published 10/09/2014, 04:50 PM
Updated 07/09/2023, 06:31 AM

While volatility has finally picked up in the U.S. dollar and global equities, there are still some pockets of the market that haven’t gone haywire (yet). One of the traditional havens for low volatility conditions, the EURCHF, remains relatively unperturbed with the big moves elsewhere.

Thus far, the Swiss National Bank (SNB) has refused to follow the European Central Bank (ECB) down the “negative interest rate rabbit hole.” Instead of increasing selling pressure on EUR/CHF, the pair has actually seen a big breakout above its 16-month bearish trend line on Friday. Thus far today, rates have pulled back to test the topside of the broken trend line before bouncing in today’s U.S. session. This is a great example of the polarity principle of technical analysis, or the idea that previous resistance levels, once broken, become future support levels. Having tested that potential floor, rates may edge back up to test 1.2130-40 resistance next.

Generally Bullish

The secondary indicators are also painting a generally bullish picture: the MACD is trending higher above its signal line and the “0” level, showing bullish momentum, though the RSI has struggled to break conclusively above the 60 level that marks bearish territory.

More broadly, the break of the long-term bearish trend line could pave the way a stronger rally toward the 61.8% or 78.6% Fibonacci retracements of the May-September decline at 1.2163 and 1.2195 respectively. On the other hand, even if rates break back below the trend line, the pair could still find buying support ahead of the SNB’s 1.20 floor near last month’s low around 1.2050.

EUR/CHF: Daily

Source: FOREX.com

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.