The EUR/CHF currency pair pulled back on Wednesday after yesterday’s climb despite a strong EU CPI data.
The currency pair had managed to conjure a major rebound on Tuesday, rallying from about 1.1060 to top 1.1110 but those gains were trimmed on Wednesday when it fell to 1.1087.
On the wider view, the EUR/CHF currency pair appears to be under intense bearish pressure with both the 100-hour and the 200-hour moving average lines pegged above the pair’s current level. This gives the bears short-term control but the bulls will be targeting every rebound going into the next few days.
EUR/CHF Fundamentals Overview
From a fundamental perspective, the EUR/CHF currency pair is trading at the back of the release of key economic data in the EU. On Wednesday, the EU Core Consumer Price Index (YoY) for June was in line with expectations at 1.1% but better than the previous period’s rate of 0.8%.
The non-core (MoM) and (YoY) CPI for June beat expectations with 0.4% and 1.3%, respectively versus 0.3% and 1.2%.
Construction output beat expectations of -0.70% growth with -0.27%. On the other hand, Germany’s 30-Year Bond Auction rate edged higher to 0.30% from 0.26% in the previous period. However, none of these numbers could produce a sustainable rally in the EUR/CHF currency pair.
EUR/CHF Technical Analysis (the 60-min Chart)
From a technical viewpoint, the EUR/CHF currency pair appears to have recently made a significant rebound, which culminated in the pair almost reaching overbought levels in the Relative STremgth Index Indicator.
The current pullback provides some interesting trading opportunities for both the bulls and the bears. The bulls will be targeting short-term profit opportunities at around 1.1104 while the bears will look to pounce by targeting profits at around 1.1068.
EUR/CHF Technical Analysis (the Daily Chart)
In the daily chart, the currency pair appears to be experiencing a long-term bearish bias, albeit in a gently inclining channel. The bears will have more opportunities to trade than the bulls in the coming days.
But as demonstrated using Andrews’ pitchfork, the EUR/CHF currency pair is pegged in the upper +50% line, which shows that despite the obvious dominance expressed by the bears, the bulls have threatened to take control on multiple occasions.
In summary, the EUR/CHF currency pair’s recent pullback exposes the uncertainties surrounding the Euro, which indicates that the current bearish channel run could continue for a while.