- During the trading session on Monday, we have seen the euro go back and forth against the Swiss franc, as we see a lot of volatile trading.
- This makes a certain amount of sense, due to the fact that the general attitude of the market is all over the place, and as a result it makes sense that a pair that is so heavily influenced by risk appetite might struggle.
- The volatility will probably only increase, but it is worth noting that the crucial 0.9250 level has held as support, at least so far it has.
Technical Analysis
The technical analysis for this EUR/CHF pair is negative, but quite frankly that’s going to be true with anything that is even remotely related to risk appetite. As the risk appetite affects this pair, the correlation you need to understand is that the Swiss franc is considered to be a “safety currency”, while the euro is considered to be further out on the risk spectrum. Furthermore, it’s probably worth noting that European investors will quite often put their money in Switzerland when a panic, because of its long history of this debility. In the environment that we find ourselves in, with trade wars breaking out everywhere, it does make a certain amount of sense that Switzerland would be appealing.
However, keep in mind that the Swiss National Bank could very well intervene, because they have done it multiple times in the past. Quite frankly, the Swiss will lose their sense of humor about a strengthening Swiss franc if it keeps up, although I don’t necessarily think that we are at that level yet. Breaking down below the swing low could open up a move down to the 0.90 level, which would be yet another major level to watch closely. If we can break above the 0.94 level, then this pair could break higher, perhaps reaching to the 0.95 area.
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