USD/CHF Soars As Eurozone Risk Abates

• Today’s announcement of higher-than-expected growth in France, Germany and the EU as a whole during Q2 has bolstered confidence that the long Eurozone recession is coming to an end. Even beleaguered Portugal registered stunning growth of 1.1% qoq, ending 10 consecutive quarters of contraction. With confidence coming back to the Eurozone, safe-haven demand for CHF diminished and both EUR/CHF and USD/CHF moved higher during the European morning. We expect that they will continue to do so and see EUR/CHF in particular as a relatively low-risk trade, with USD/CHF offering more volatility.

• During the last hours’ trading activity the bulls boosted USD/CHF up, penetrating aggressively the 0.9348 (S1) level, currently heading towards the next hurdle at 0.9388 (R1). It seems that the pair has the necessary momentum to challenge that level, since the ADX reading is above 20, indicating further upward movement, confirmed by the +DI being over the -DI. Moreover, the price is trading above both the 20- and 200-hours moving averages, confirming the bullish picture of the pair. However, the price has been pushed far away from the uptrend line and a possible correction towards it at some point in the future would not surprise us.

• Support: Support is found at the 0.9348 (S1) level, followed by the 0.9322 (S2) and 0.9284 (S3) respectively.

• Resistance: Resistance is at early August highs of 0.9388 (R1), followed by the 0.9477 (R2) and 0.9535 (R3), found from the daily chart.
USD/CHF" width="1729" height="832">
Disclaimer: This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research. IronFX may act as principal (i.e. the counterparty) when executing clients’ orders. This material is just the personal opinion of the author(s) and client’s investment objective and risks tolerance have not been considered. IronFX is not responsible for any loss arising from any information herein contained. Past performance does not guarantee or predict any future performance.

Redistribution of this material is strictly prohibited. Risk Warning: Forex and CFDs are leveraged products and involves a high level of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary. IronFx Financial Services Limited is authorised and regulated by CySEC (Licence no. 125/10). IronFX UK Limited is authorised and regulated by FCA (Registration no. 585561). IronFX (Australia) Pty Ltd is authorized and regulated by ASIC (AFSL no. 417482)