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Trading Outlook – EUR/CHF
Posted On 23 Feb 2015
Comment: 0
Originally updated: 07:00
Trading Bias: LONG
Currency pair: EUR/CHF
Current Sentiment: Bullish
In today’s trading session we will be focussing on buying opportunities on EUR/CHF.
Fundamentals:
Greece and the Eurogroup reached a temporary agreement on Friday; Greece extended their bailout by a further 4 months, this removes any short term fears of a Grexit and uncertainty surrounding the currency as such we can expect some mild buying interest on the EUR as any immediate fears regarding a sudden devaluing of the currency have been temporarily alleviated.
We’ve also recently had commentary from the Swiss Finance Minister who calls 1.1000 in EUR/CHF a “critical limit” for their Swiss economy saying that 1.1000 is too low but sufficient for most companies just to survive, off the back of which we can expect further SNB intervention on the pair to push the price up to those levels.
Due the above we can look to take some scalps on the pair but don’t get caught out holding a EUR long position as overall it is a weak currency and is expected to keep devaluing with ECB QE starting next month.
Technicals:
We expect this pair to rally during today’s session.
There is strong support at 1.0690 -1.0710 which could provide trading opportunities should the price pull back. Look for the price to bounce off this level if it retraces back to it.
Remember to be aware of intra-day news as this can very often change the sentiment which makes our trade weaker. Look for any news that could be negative for this pair, which would change the sentiment to bearish.
Other Market Moving News:
Overnight pairs traded in relatively tight ranges muted in anticipation of key risk events later in the week including Janet Yellen’s key testimony. The Dollar index dictated price action across the board with JPY being the main beneficiary underpinned by hefty buying by leveraged accounts.
Russia’s sovereign debt rating has been cut to Ba1 from Baa3, with a continued negative outlook.
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