EUR/CHF Daily Outlook
Daily Pivots: (S1) 1.1493; (P) 1.1571; (R1) 1.1611;
Despite dipping to 1.1519, EUR/CHF quickly recovered and intraday bias is turned neutral first. Outlook is unchanged at the the corrective pattern from 1.2004 is still in progress. And, another decline is expected before the correction completes. Below 1.1505 minor support will turn bias to the downside for retesting 1.1366 low first. Above 1.1656 will extend the rebound to 61.8% retracement of 1.2004 to 1.1366 at 1.1760. But, we’ll we’ll look for reversal signal above 1.1760.
In the bigger picture, current development suggests solid rejection by prior SNB imposed floor at 1.2000. Considering bearish divergence condition in daily and weekly MACD, 1.2004 should be a medium term top. And price action from 1.2004 is correcting the up trend from 1.0629. Such correction is expected to extend for a while and therefore, we’re not anticipating a break of 1.2004 in near term. Another decline cannot be ruled out yet. But in that case, strong support should be seen at 1.1198 (2016 high), 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to contain downside.
EUR/GBP Daily Outlook
Daily Pivots: (S1) 0.8687; (P) 0.8755; (R1) 0.8792;
EUR/GBP dropped sharply but it’s still staying in range of 0.8693/8844. Intraday bias remains neutral at this point. Another rise is expected as long as 0.8693 support holds. Break of 0.8844 will resume the rebound from 0.8620 for 0.8967 cluster resistance (50% retracement of 0.9305 to 0.8620 at 0.8963). However, break of 0.8693 will bring deeper fall back to retest 0.8620 low.
In the bigger picture, for now, the decline from 0.9305 is seen as a leg inside the long term consolidation pattern from 0.9304 (2016 high). Such consolidation pattern could extend further. Hence, in case of strong rally, we’d be cautious on strong resistance by 0.9304/5 to limit upside. Meanwhile, in another decline attempt, we’d expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.
