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EUR/CHF price analysis: upside barrier at 1.0822-25

By Alpha Analysis

EUR/CHF price analysis: although the immediate bias is mildly bullish, with a trend line barrier and resistance seen at 1.0822-1.0825, we look for rallies to be limited

EUR/CHF price analysis

Market highlights from the past week

Friday July 10: markets held firm on Friday which curbed the extent of franc selling to some extent with markets also monitoring progress towards the EU recovery fund

Monday July 13: Swiss sight deposits increased to CHF688.6bn for the latest week from CHF687bn the previous week which suggests that the National Bank did intervene in the FX market in the latest week

Tuesday July 14: Swiss National Bank chair Jordan reiterated that forex interventions are the most effective instrument to curb the Swiss franc

Wednesday  July 15: the Swiss franc weakened significantly on Wednesday with potential defensive support eroded by solid risk appetite

Thursday July 16: the franc is liable to lose ground if the EU can find agreement on the recovery fund at the Summit meeting while failure to secure agreement would provide some net franc support

EUR/CHF price analysis

Let us have a look at the technical viewpoint: 

Monthly: levels close to the 61.8 per cent pullback of 1.0550 (from 0.9651-1.2005) found buyers. May price action posted a bullish Outside Bar, often an indication of the end of a trend and the start of a new upward bias 

Weekly: holding within a bearish channel formation. Trend line resistance is located at 1.0822. Levels above trend line resistance have found selling interest 

Daily: levels close to the 78.6 per cent pullback of 1.0590 (from 1.0502-1.0916) found buyers. Resistance is seen at 1.0825

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Intraday four-hour: broke out of the wedge formation to the upside. The measured move target of 1.0769 has been achieved. Levels close to the 61.8 per cent Fibonacci at 1.0795 (from 1.0915-1.0601) have found sellers. The 78.6 per cent pullback level is located at 1.0847, close to the daily resistance. 

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Outlook: although the immediate bias is mildly bullish, with a trend line barrier and resistance seen at 1.0822-1.0825, we look for rallies to be limited 

Possible trade set-up: 

Action: selling at 1.0820

Stop: 1.0880 (above 78.6 per cent)

Target: 1.0590 (medium term support)

Potential return on risk to first target:  R3.8 (reward 230/risk 60)

Risk Warning - Your capital is at risk - Losses can exceed deposits

Trading spot foreign exchange and futures on margin carries a high level of risk and may not be suitable for all investors. You may lose all your capital. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in spot foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. If you are in any doubt about investment or the mechanics of such products, you should seek independent financial advice

Euro / Swiss Franc
Daily change
1.07235
Low: 1.07207
High: 1.077