The EUR/CHF currency pair plunged to 1.1264 at the start of the week to hit the lowest level since April 10 of this year. The pair had appeared to consolidate in a gapped sideways movement between late April and early this month that oscillated between 1.1360 and 1.1440.
However, after pulling back on Friday last week, it failed to rebound as had been the case in three previous occasions. Instead, the EUR/CHF Currency pair extended losses to hit a new four week low of about 1.1264.
EUR/CHF Fundamentals Overview
From a fundamental perspective, the EUR/CHF currency pair appears to pegged in a sideways movement with a short-term bearish bias. This comes following the recent comments by the Swiss National Bank (SNB) Chairman and updates from the European Central Bank (ECB).
SNB Chair Thomas Jordan last week ruled out the possibility of a fixed exchange rate to the Euro saying that the Swiss Franc is still highly valued given the current economic conditions.
On the other hand, the ECB Ignazio Visco spoke on Thursday morning saying that the Eurozone economy, Italy and the global economy are facing difficult times ahead.
He also mentioned US trade tensions as a stumbling block on international trade, which is affecting economic growth. These comments have been deemed by traders as being dovish, which is why the Euro continues to be pegged down by the Swiss Franc.
EUR/CHF Technical Analysis (the 240-min Chart)
Technically, the EUR/USD pair appears to be poised for a short-term consolidation around 1.1300 level following the latest pullback and rebound.
As such, the bulls will target opportunities around 50% Fib level as shown on the 240-min chart while the bears will look to pounce at 1.1292. More opportunities can be found at 1.1334 for the bulls while the bears can strike profits by targeting the 61.80% Fib level at 1.1280
EUR/CHF Technical Analysis (the Daily Chart)
In the daily chart, the pair appears to be trading within a major sideways channel that dates back to August last year. And given the current position of the EUR/CHF in that trend, it looks like there is room to run down below before the next rebound.
This hands the control to the bears in the short-term but in the intermediate time frame, the topsy-turvy movement is expected to continue. This creates multiple opportunities for traders as we head to the second half of the month of May.
In summary, the EUR/CHF currency pair appears to have no distinct directional movement but there will be short-term pullbacks and rebounds to pounce on.