Remember EUR/CHF’s potential resistance zone that we identified earlier this month?
Well, EUR/CHF has reached that level and it’s make or break time for euro bulls and bears!
In case you missed it, we’re taking a closer look at the daily time frame:
EUR/CHF Daily Forex Chart by TradingView
As you can see, EUR/CHF has gotten enough support to bounce from the .9300 psychological handle and test its current .9450 levels.
And why not? European Central Bank (ECB) members including their head honcho Christine Lagarde have been busy telling us that we’re jumping the gun with our interest rate cut expectations. It may have also helped that USD demand has tempered a bit and allowed FX counterparts like EUR to gain some traction.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the euro and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
How high can EUR/CHF fly before the sellers step in?
In a few hours, we’ll get the first peeks at the business activity and conditions in the Euro Area. If the Euro Area PMI reports continue to suggest weak demand but also higher prices, then EUR may take hits including against CHF.
EUR/CHF is already flirting with the .9450 minor psychological level that served as support in September 2022, October 2023, and December 2023.
EUR bears could also note that EUR/CHF’s current levels are not too far from the daily time frame’s R1 (.9470) Pivot Point, 100 SMA, and a trend line resistance that’s been around all 2023.
Strong bearish candlesticks that confirm a rejection around R1 could draw in more sellers and extend EUR/CHF’s downtrend. The pair could dip back to its .9360 Pivot Point line or retest the .9300 previous low.
If you’re confident that EUR/CHF will more likely extend its upswing, then you can also bet on a possible upside breakout. Just make sure that EUR/CHF is trading consistently above the trend line and the 100 SMA so you don’t get caught in a fakeout!
Whichever direction you choose to trade, make sure to consider EUR/CHF’s average volatility when making your trading plans!