The EUR/CHF currency pair on Thursday plunged to hit a new 8-month low of about 1.0732 following yesterday’s disappointing EU data. The currency pair has been on a downward movement since the start of the week and this looks likely to continue through Friday.
The currency pair is now trading close to the oversold boundary of the RSI indicator, and this could provide a key support level for the bulls to target a rebound.
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. On Wednesday, the EU trade balance for November missed the n.s.a target of EUR 23.3billion with EUR 20.7 billion. The seasonally-adjusted reading of EUR 19.2 billion was also short of the expected EUR 21.2 billion.
The November w.d.a (YoY) industrial production change of -1.5% was less than the projected change of -1.1%. The seasonally adjusted (MoM) change also disappointed with 0.2% versus 0.3%. Going into Friday, traders will be looking forward to the EU CPI for December.
In Switzerland, there was nothing much during the week, but on Friday, traders will be looking forward to the change in producer and import prices from last month. On Thursday, German CPI matched expectations as did the harmonized index of consumer prices for December which came in at 1.5% (YoY) and 0.6% (MoM).
EUR/CHF Technical Analysis (the 60-min Chart)
Technically, the EUR/CHF currency pair appears to be trading in a rapidly descending chart, which indicates an increase in the short-term bearish bias in the market sentiment. The currency pair has now hit a new multi-month low and is closer to the oversold levels of the RSI indicator. This could spark a short-term rebound.
Therefore, the bulls will be targeting short-term profits at around 1.0750 or higher at 1.0780. On the other hand, the bears will look to retain short-tern control by targeting profits at around 1.0732 or lower at 1.0717.
EUR/CHF Technical Analysis (the Daily Chart)
In the daily chart, the EUR/CHF currency pair also appears to be trading in a descending channel, which again suggests a long-term bearish bias in the market sentiment. The pair looks set to slide further in the coming days with targets well below 1.0620.
Therefore, the bears will be targeting long-term profits at around 1.0618 or lower at 1.0521. On the other hand, the bulls will hope for a major reversal towards 1.0844, 1.0929 or higher at 1.1034.