The EURCHF has held within a broad range over the last two month of trading, and as the European Central Bank is widely expected to lower the benchmark interest rate by 50bp to 1.50%, the pair is likely to fall lower over the remainder of the week.
Currency Pair: EUR/CHF
Chart: 60 Min Charts
Short-Term Bias: Bearish
Analysis
The EURCHF has held within a broad range over the last two month of trading, and as the European Central Bank is widely expected to lower the benchmark interest rate by 50bp to 1.50%, the pair is likely to fall lower over the remainder of the week. After slipping to a low of 1.4299 in October, the pair snapped back to reach a high of 1.5885 on 12/15, but the sharp retracement from the December high and the lack of momentum to retrace the sell-off suggests that traders are becoming increasingly bearish against the euro. As a result, I expect the euro-franc to weaken further over the month, and we may see the pair work its way towards the October low to retest 1.4299 for short-term support. Over the next few hours of trading, the EURCHF may continue to push higher to fill-in the gap from the 120 SMA however, as the RSI approaches oversold territory, gains to the upside are likely to be capped, and may trade within a tight range over the remainder of the session. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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