The EUR/CHF currency pair on Friday bounced off the current weekly lows of about 1.0810 to trade above 1.0838 after the latest round of EU data. The currency pair appears to be trading within a gently descending channel formation in an attempt to trigger an upward reversal.
Friday’s rebound pushed the currency pair above the 100-hour moving average. It has also surged closer to the overbought levels of the 14-hour RSI.
EUR/CHF Fundamentals Overview
From a fundamental perspective, the EUR/CHF is trading at the back of a very busy period in the EU market. On Friday, the preliminary EU Markit PMI Composite for July beat the expectation of 60 with 60.6. The manufacturing and services PMIs also outperformed 62.5 and 59.5 with 62.6 and 60.4, respectively. The German manufacturing PMI beat the expectation of 64.2 with 65.6 while the PMI Composite outshone 60.8 with 62.5.
On Thursday, the European Central Bank kept the base interest rate unchanged at 0.0%, while the deposit rate remained pinned at -0.5%. The preliminary EU consumer confidence for July missed the expectation of -2.5 with -4.4. In Switzerland, Imports for June increased to 22.446 billion (MoM) while imports soared to 16.916 billion. Both figures posted declines in the previous period.
EUR/CHF Technical Analysis (the 60-min Chart)
Technically, the EUR/CHF currency pair appears to be trading within a gently descending channel formation in the 60-min chart. This comes at the back of a sharper descending trend, implying an attempt by the bulls to initiate an upward reversal. The pair recently advanced closer to the overbought conditions of the 14-hour RSI.
The bulls will be looking to extend the current upward movement towards 1.0856 or higher to 1.0875. On the other hand, the bears will look to pounce on profits at around 1.0821 or lower to 1.0802.
EUR/CHF Technical Analysis (the Daily Chart)
In the daily chart, the EUR/CHF currency pair appears to be trading within a descending channel formation. This indicates a significant long-term bearish bias in the market sentiment. The pair continues to trade closer to the oversold levels of the 14-day RSI.
The bears will look to retain long-term control of the pair by targeting profits at 1.0770 or lower at 1.0703. On the other hand, the bulls will target long-term profits at 1.0918 or higher at 1.0978.