The EUR/CHF currency pair on Friday extended the current weekly declines towards the 1.0540 level following the latest round of EU PMIs. The currency pair has traded in a consolidative descending wedge since late last week. It now appears to be approaching a breakout from the bearish wedge.
The currency pair has dropped below the 100-hour and the 200-hour SMA lines. It is pegged in the middle of the 60-min 14-period RSI. This suggests that the current trend could continue through early next week.
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. The global financial market continues to suffer from the adverse effects of the coronavirus pandemic. Four of the EU’s main economic powers continue to experience the worst effects of the virus with the highest number of infections and deaths in the region. Italy, Spain, France, and Germany have all reported 10s of thousands of positive cases of COVID-19. Deaths are into the thousands as well. Lockdowns continue across the region.
Based on the latest economic data, the EU Markit Services PMI missed the expectations of 28.4 with 26.4 while the PMI composite of 29.7 was below the expectation of 31.4. Retail sales for February outperformed estimates but the preliminary core CPI for March missed the (YoY) forecast with 1% versus 1.2%. The (MoM) figure for the overall CPI also fell below estimates with -0.6% versus -0.2%. In Switzerland, the preliminary CPI for March came in line with expectations while retail sales were better than the consensus estimates.
EUR/CHF Technical Analysis (the 60-min Chart)
Technically, the EUR/CHF currency pair appears to be trading under strong bearish pressure. The pair is pegged within a consolidative descending wedge, which indicates a short-term bearish bias in the market sentiment.
Therefore, the bulls will be targeting rebound profits at around 1.0561 or higher at 1.0576. On the other hand, the bears will be looking to retain short-term control by targeting profits at around 1.0539 or lower at 1.0525.
EUR/CHF Technical Analysis (the Daily Chart)
In the daily chart, the EUR/CHF currency pair appears to be experiencing a long-term bearish bias in the market sentiment. The pair is trading in a descending channel, which extends back to the start of 2018. It has recently fallen close to the trendline support.
The bulls will be targeting long-term rebound profits at around 1.0668 or higher at 1.0778. On the other hand, the bears will look to pounce for profits at around 1.0440 or lower at 1.0330.