The EUR/CHF currency pair continued to trade on a sideways movement on Friday after halting what has been a major weekly decline late on Thursday. The pair fell on Wednesday and Thursday morning to hit a low of 1.1206 but now appears to be holding firm just above the 1.1220 level.
On a broader perspective, the EUR/CHF currency pair maintains a strong position above a key consolidation zone (1.1200-1.1170) and this could be the launch-pad for a major recovery.
EUR/CHF Fundamentals Overview
From a fundamental perspective, the Euro continues to derive strength from the economic performance of the EU block with major economies within the EU playing key roles.
Germany, Italy, and France will continue to be key if the Euro can find some momentum in the coming days. Looking forward, there is a low expectation on inflation data for May, which will come out on June 4. On the other hand, May’s announcement of her resignation and plan to vacate the UK PM office continue to weigh on the Euro.
On the other hand, the Swiss Franc is considered as a safe-haven in the world of financial markets. Recently, the Swiss National Bank (SNB) alternate member of Governing Board said that the SNB will be willing to intervene (potentially by capping the exchange rate) should the situation deem it appropriate.
EUR/CHF Technical Analysis (the 240-min Chart)
Technically, the EUR/CHF currency pair’s bearish bias remains in shape. The current halt is likely short-term with movement further down likely as it is demonstrated in the 240-min Chart above.
Therefore, the bulls will be targeting profits at around 1.1238 while the bear will look to pounce by targeting opportunities around the 1.1208 level in the short-term.
EUR/CHF Technical Analysis (the Daily Chart)
In the daily chart, the pair appears to be trading within a horizontal channel that has a high of about 1.1470 and a low of about 1.1170 which dates back to August last year. This creates multiple trading opportunities for both the bulls and the bears as demonstrated in the chart above.
The bulls will target long-term profits by targeting the range highs while the bears will look at the range lows.
In summary, the EUR/CHF currency pair appears to enjoy a short-term bearish bias. However, the long-term view is still a battle for both sets of traders with no particular winner.