The Euro has been noisy on Tuesday, as we continue to chop back and forth against the Swiss franc. This is a pair that I think continues to see value hunters. This market will continue to attract longer-term investors I believe.
EUR/CHF
The market is hanging around the 0.92 level as well, and that is an area that I think is going to continue to be a bit like a magnet for price. Ultimately, this is a market that I think will see both buyers and sellers jumping into this region. This behavior probably continues, but if we get a sudden “risk-on behavior”, and with this, the markets will be looking for external help.
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Technical Ascending Triangles and Competitive Trade Dynamics
That being said, keep in mind that the interest rate differential does favor the euro quite significantly, and that a lot of times will send this market to the upside if we have good news. After all, you have to keep in mind that the European Union surrounds Switzerland and 85% of Swiss exports head into the European Union.
This is what the Swiss like to see: the euro is strengthening. It makes their exports into the EU cheaper. This is part of why the Swiss National Bank pays so much attention to this pair. This is a central bank that will not hesitate to get involved if there is some kind of massive Franc buying.
You can look at this chart and see a bit of an ascending triangle, and breaking above the 0.9250 level cleanly puts this market towards the 0.95 level based on the measured move over the longer term. Short-term pullbacks, I think, still offer buying opportunities, with the 50-day EMA offering support and then the 0.9150 level. I have no interest in shorting this EUR/CHF pair. I do think eventually it tries to go higher, but we need some help here. In the meantime, we get paid to hold this pair.
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