The EUR/CHF pair fell during the day on Monday, as we continue to see quite a bit of volatility in this market. However, overall it has been an interesting move higher, as we have been very insistent on rising over the longer term. Recently, I had suggested that the 1.10 level is an area that would be vital for the next move in this pair. The fact that we have broken well above that, and have actually broken above the 1.11 level suggests to me that this pair is going to go higher given enough time.
I think that the market still will have an upward bias, but it’s not necessarily going to be the easiest move to make. I think that the Euro will continue to be favored over the Swiss franc in general, mainly because the Swiss National Bank seems to be so hell-bent on devaluing the Swiss currency in general.
Dynamic support
Obviously, there is quite a bit of support coming out of the Swiss National Bank for this pair, and this is generally where they make their presence known. After all, the Swiss send 80% or more of their exports into the European Union. This is exactly where they need to see the value the Swiss franc drop. Beyond that, the 20 day exponential moving average is marked on this chart, and you can see how it has been such nice dynamic support over the last several weeks. With this being the case, it is obvious that we are in an uptrend, and finally we had also tested the 1.11 level during the day on Monday, which was an area where we previously had resistance. Now that we are above it, it should be support in theory at least.
I am a buyer of this pair in general, and am simply waiting for some type of short-term bounce or perhaps just an impulsive move higher. I have no interest in selling at all.
