Something is climbing the charts, and it’s not Jack Harlow’s “Lovin On Me.”
I’m talking about EUR/CHF yo! After breaking above its December consolidation, the pair looks set to test one or two potential resistance levels.
Where do you think EUR bears will show up to play?
EUR/CHF Daily Forex Chart by TV
If you zoom in on the 4-hour time frame, you’ll see that EUR/CHF recently broke above a consolidation that started near the end of December 2023. EUR/CHF is currently trading at the .9350 near the Pivot Point level (.9360) in the daily time frame.
How high can EUR/CHF fly before the sellers show up and turn the tides against the euro?
A bit of anti-USD sentiment hit the markets after the U.S. showed stickier-than-expected high inflation which supported “higher for longer” speculations for the Fed’s interest rates.
The euro also likely benefited from the slight improvement in risk sentiment. The common currency gained pips despite ECB President Lagarde saying in an interview, “I think that rates, barring any further shocks or unexpected data, will not continue to go up.”
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!
If the euro loses momentum ahead of the weekend, then we’ll look for bearish candlesticks around the daily chart’s Pivot Point level. A rejection may draw in sellers and drag EUR/CHF back to its 2024 lows below .9300.
Meanwhile, a breakout above the Pivot Point level opens the pair to retest the .9500 psychological level that was also a key support in September, October, and then December 2023. The .9500 area is also closer to the R1 (.9470) as well as the 100 and 200 SMAs in the chart and could draw in sellers in case EUR sees more buying pressure before losing momentum.
But if EUR/CHF turns down from its current levels, then EUR traders may consider pricing in an extension of EUR/CHF’s downtrend and place short trades below January’s lows.
What do you think? How will EUR/CHF react to its .9350 inflection point before picking up a direction?
