July 27, 2021 14:05:56
The swissie’s safe haven status has seen it top the list of major currencies this month. During this time, EUR/CHF suffered its biggest sell-off in over three years a few weeks ago and the pair has been trapped in bearish consolidation for most of July, range trading between 1.08 and 1.0850. Crucially, prices failed to gain a foothold above the June low at 1.0870 and the 200-day SMA just above here at 1.0888 so this zone acts as major resistance.
We signalled when the pair aggressively sold off that we would probably see some consolidation. But now with the MACD still in negative territory and the RSI pointing mildly lower, the bear channel in play since this year’s high can extend. The choppy risk environment continues to add to this downward pressure and targets for the bears if they can break 1.08 include 1.0736/38 and then 1.0660/72.
Trading CHF always means we should be wary of FX intervention by the SNB who will actively step in to curb any franc strength. If they defend the 1.08 level then expect another rebound and play the long side, in the short-term at least.
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