- The Euro was very quiet against the Swiss franc during the Friday trading session as we continue to hang around the 0.96 level.
- This is an area that has been important multiple times, and now that we have the 50-Day EMA hanging around the same area, it does make a certain amount of sense that we would see some hesitation in this general vicinity.
- The next question is whether or not this previous resistance barrier would now offer a bit of support going forward.
EUR/CHF Ready for a Move to Parity?
The Monday candlestick should be rather crucial because it will give us an idea as to what the market is going to do for a bigger move. If we rally and have a green candlestick, then it’s likely that we could continue to see upward momentum. That would need the Euro to take off against multiple other currencies as well, as this pair tends to be more or less a measuring stick on Euro strength. Keep in mind that these 2 economies are highly intertwined, so with that in mind, it does tend to make this market very choppy.
If we break down below the bottom of the candlestick and then form a red candlestick during the day on Monday, then it’s possible that we could see this market drop back down to the 0.95 level. I don’t necessarily think it will fall apart, just that we will start to drift in that general vicinity. Keep in mind this pair does tend to be very quiet, so you should have plenty of time to think your way through the position and of course calculate the risks being taken. With that, I like this pair for a shorting opportunity more than anything else, but if we were to break above the 0.98 level, it’s very possible that we could see this market look into the parity handle.
On the upside, parity could be a major ceiling to attempt to get to, and if we were to break above but I think that would be a major turn of events as we would not only break above that psychological barrier, but we could also break above the 200-Day EMA. Looking at this chart, this is simply a market that continues to price in all of the negativity in the European Union.
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