The EUR/CHF currency pair on Thursday plunged to trade at around 1.0799. This came after it found strong resistance around the 100-hour SMA. The currency pair had earlier rallied to top 1.0832 but eased off late on to trade closer to the current weekly lows.
The pair continues to trade in a descending channel, which indicates a short-term bearish bias in the market sentiment. Nonetheless, it appears that there is still room to run lower before hitting the oversold zone of the RSI indicator in the 60-min chart.
EUR/CHF Fundamentals Overview
From a fundamental perspective, the EUR/CHF currency pair is trading at the back of a relatively busy period in the EU market compared to the previous week. In November, German exports posted (MoM) decline of 2.3%, which was worse than the expected decline of 0.5%. On the other hand, the seasonally adjusted trade balance for the same period came short of expectations with EUR 18.3 billion versus EUR 20 billion.
However, the non-seasonally adjusted current account balance beat EUR 16.9B with EUR24.9B. Industrial production also impressed by beating the s.a (MoM) expectation of 0.7% with 1.1%. Also, the non-seasonally adjusted industrial production beat the (YoY) expectation of -3.8% with -2.6%. Imports for November, on the other hand, missed the expected (MoM) change of 0.2% with -0.5%.
In Switzerland, retail Sales for November missed the expected (YoY) change of 0.4% with 0.0%. Also, the SNB’s foreign currency reserves for December edged lower to 771 billion down from 783 billion in the previous period.
EUR/CHF Technical Analysis (the 60-min chart)
Technically, the EUR/CHF currency pair appears to be trading in a descending channel, which shows that there is a short-term bearish bias in the market sentiment. The pair has recently bounced off the 100-hour SMA up top which triggered the latest pullback.
Therefore, the bears will be targeting short-term profits at around 1.0784 or lower at 1.0770. On the other hand, the bears will be looking to pounce on any rebounds by targeting profits at around 1.0820 or higher at 1.0832.
EUR/CHF Technical Analysis (the Daily Chart)
In the daily chart, the EUR/CHF currency pair also appears to be trading under considerable bearish pressure in a descending channel. The pair has recently dropped below the 100-day SMA while the 200-day SMA is located several pips higher. This confirmed that the bears retain control in the long-term.
Therefore, long-term bearish profits can be targeted at around 1.0703 or lower at 1.0636. On the other hand, the bulls will hope for a major reversal by targeting profits at around 1.0905, 1.0972, 1.1054 or higher at 1.1168.