The EUR/CHF dropped considerably today, but continues to move sideways on the short term, signalling that is undecided. Has dropped as the Euro is weaker again, the European currency has depreciated sharply also versus the USD, Cable and versus the Yen, so the EUR/CHF drop was natural today also because the Euro-zone data have come in mixed today, while the Swiss Franc has received a helping hand from the Switzerland data.

Technically, the EUR/CHF is somehow expected to increase in the coming period because the behavior has changed when the rate has started to make higher lows. The CHF surged also versus the Euro as the Switzerland KOF Economic Barometer  surged from 106.9 to 107.6 points in March, even if the traders have expected a drop to 105.9 points.

The Euro was punished by the poor Euro-zone data, the German Prelim CPI rose by 0.2% in March, but less versus the 0.4% estimate and less versus the 0.6% growth in the previous reading period, while the Spanish Flash CPI surged only by 2.3%, less compared to the 2.6% estimate and less versus the 3.0% growth in February.

You can notice that the rate is moving somehow sideways, has found strong support at the lower median line (LML) of the major descending pitchfork and now is trading much above the 1.0630 swing low.

The current drop is natural after the false breakout above the median line (ml) of the major descending pitchfork, could come to retest the lower median line (lml) of the ascending pitchfork  before will start another leg higher. We’ll have a confirmation of another upside movement only if the price will jump and will consolidate above the median line (ML) of the major descending pitchfork, you can see that we had several false breakouts in the past, but a valid breakout will attract more buyers.

The downside movement could be considered to be a Falling Wedge pattern, we could have a larger rebound if the price will breakout from this chart pattern and will make a consolidation right above the dark blue downtrend line.