Forex Technical Update
The EUR/CHF has been hovering above 1.2030 since February with minimal volatility except for the few days before the SNB quarterly policy meeting back in mid -March. Since then, the market has been testing the 1.2030 range support. During the 4/4 Asian-European session, the market fell through and continued until it cracked 1.20 (a level the Swiss National Bank has pledged to defend). Note in the daily chart that this is the 200 day simple moving average as well. The question EUR/CHF watchers are all asking is whether the SNB will do anything concrete to defend this level now that it is under attack and has cracked.
The 4H chart also shows a market with bearish momentum, though the RSI now shows oversold condition as it tags 30. Price action trades at the lower Bollinger band (3 standard deviations from the 200 SMA). With the EUR pressured, even if the SNB defends the 1.20 level, it might take awhile before the market actually puts on EUR/CHF strength. If the EUR/CHF falls below the 1.30 support and extends its bearish tone, expect the EUR/CHF to continue testing the SNB floor.
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Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.