Chart of The Day EURCHF
EURCHF Probable Price Path & Potential Reversal Zone
EUR: Bloomberg quoted reports from insiders of the European Central Bank that the members of the Central Bank did not have much concern about the recent surge in the yield of government bonds, and there is no need to take further actions, including expanding the scale of the emergency bond purchase plan.. The production price index in the Eurozone was flat year-on-year in January, which was lower than market expectations of a 0.1% increase
CHF:The premium of the 10-year U.S. Treasury bill yield relative to the Swiss bond yield over the same period rose to over 170 basis points, a record high in nearly a year; the discount of the German Treasury bond yield relative to the Swiss bond yield increased from nearly one in mid-February. The annual low is 11.7 basis points, narrowing to less than 4 basis points. Switzerland’s February inflation figures were weaker than expected, rising 0.2% month-on-month and down 0.5% year-on-year, lower than expected 0.4% and -0.3%
From a technical and trading perspective, Option barriers halt Swiss franc's drop; beware a break, EURCHF 1.10995 EBS 2021 peak and best since July 2019, trading desks suggest high has been defined by defence of 1.1100 barrier, hedging for risk of CHF rally likely large given length time below 1.1100. EURCHF lacks depth, EUR sold in barrier defense matched by stops above, likely to rally quickly if option barrier triggered, size of SNB's intervention suggests there's a huge amount invested in CHF.
From a technical perspective range traders will be watching for bearish rejection patterns to develop above 1.1150 allowing a stop run through the pivotal 1.11 handle. 1.1150 represents the yearly projected range resistance and the projected ascending trend channel resistance of an 11 month channel, as this area contains the upside advance look for a minimum three wave corrective pullback to test 1.09 from above
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!