The EUR/CHF currency pair on Thursday pulled back off the 1.0580 level to trade at around 1.0560 following the latest round of EU data. The currency pair has been trading in a consolidative diving wedge since late last month amid the coronavirus pandemic. This indicates a relative bearish bias in the market sentiment.
The pair is currently tagging the edge of the overbought level of the 60-min RSI. This explains today’s pullback. The currency pair also remains slightly below the 100-hour and the 200-hour SMA lines.
EUR/CHF Fundamentals Overview
From a fundamental perspective, the EUR/CHF currency pair is trading at a time when global markets are ina financial turmoil. The coronavirus pandemic has hit Europe hard claiming 10s of thousands of lives. Governments have responded by announcing total lockdowns, which have restricted business activity. In response to the crisis, the European Central Bank (ECB) announced this week a plan to roll out temporary easing measures to try to stimulate the economy.
On Monday, the EU Sentix Investor Confidence for April edged lower to -42.9 down from -17.1 in the previous reading. It also missed the expectation of -30.3. In Germany, Factory Orders for Feb. beat the (MoM) estimate of -1.9% with -1.4%. Industrial Production also outperformed expectations while Exports impressed with 1.3% versus -0.9%. The Trade Balance of EUR 21.6B was better than the consensus estimate of EUR 17.5B. In Switzerland, the unemployment rate came in line with expectations at 2.8% while France’s Trade Balance missed expectations.
EUR/CHF Technical Analysis (the 60-min Chart)
Technically, the EUR/CHF currency pair appears to be trading in a descending pattern amid selling pressure. The pair continues to consolidate towards 1.0550. This comes after finding strong resistance around 1.0580.
The bears will be targeting short-term profits at around 1.0543 or lower at 1.0522. On the other hand, the bulls will look to extend rebound towards 1.0580 or higher at 1.0600.
EUR/CHF Technical Analysis (the Daily Chart)
In the daily chart, the EUR/CHF currency pair appears to be finding strong trendline support following the recent pullback. The pair has descended to trade at 1.0563, the lowest level since 2015. This could trigger a short-term rebound.
The bulls will be targeting rebound profits at around 1.0742, 1.0863 or higher at 1.0988. On the other hand, the bears will target long-term profits at around 1.0410, 1.0243, or lower at 1.0087.