EUR/CHF Extends Multi-Year Lows After Stimulus Package Hint by the ECB

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The EUR/CHF currency pair plunged further on Thursday after the European Central Bank (ECB) hinted that the next stimulus package could be bigger than what the market expects. The currency pair extended the current 2-year lows to hit 1.0832 before making a small rebound to end the afternoon session at around 1.0848.

From a broader perspective, the EUR/CHF currency pair continues to trade in a consolidative bearish wedge which could signal a major breakout in the pair in the coming days.

EUR/CHF Fundamentals Overview

From a fundamental perspective, the EUR/CHF currency pair is trading at the back of some key headline news from the ECB, which hinted that the next stimulus package could be bigger than what the market is expecting. This created a negative sentiment towards the Euro, resulting in a major plunge against rival currencies.

On Wednesday, the preliminary GDP for the EU came in line with expectations at 1.1% growth (YoY) for Q2 while the (QoQ) data was also in line at 0.2% growth. 

On the other hand, Industrial Production missed expectations on both (YoY) and (MoM) basis for June with -2.6% and -1.6% versus -1.2% and -1.4% respectively. The Unemployment Change was also below expectations after posting a growth of 0.2% (QoQ) and 1.1% (YoY) versus 0.3% and 1.2%, respectively.

EUR/CHF Technical Analysis (the 60-min Chart)

From a technical viewpoint, the EUR/CHF currency pair appears to be trading in a descending wedge in a triangle formation. The Relative Strength Index Indicator shows that this trend could continue through Friday as the pair continues to trade within the normal trading zone.

Therefore, the bulls will target short-term profits at around 1.0873 or higher at 1.0900 while the bears will look to pounce by targeting profits at around 1.0832.

EUR/CHF Technical Analysis (the Daily Chart)

In the daily chart, the EUR/CHF currency pair appears to be experiencing extreme bearish pressure as it continues to trade within a diving channel. The pair is now tagging the border between the oversold level and the normal trading zone, which suggests that a rebound could be on the cards.

Therefore, the bulls will be eyeing long-term profits at around 1.0977 and higher at 1.1055 while the bears will hope to maintain control by targeting profits at around 1.0793 or lower at around 1.0718.

In summary, the EUR/CHF currency pair continues to experience intense bearish pressure in the long-term trading chart, but in the short-term, the bull will be optimistic of a rebound.

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