The EUR/CHF pair has rallied on Monday, breaking the top of a shooting star shaped candle from Friday, showing signs of resiliency. By breaking the top of that candlestick, and making a fresh three day holiday, it’s very likely that the EUR/CHF pair will tried to reach towards the recent highs. Obviously, there is a bit of momentum building here in a pair that is typically very quiet.
What’s even more interesting is that the 200 day EMA is sitting just above the 1.1350 level, so that of course will have a certain amount of technical influence. In general, this is a market that tends to be more of a grinder, so looking for explosive and quick profits probably won’t make much sense. However, by turning the shooting star shaped candle stick into an inverted hammer, that’s a very bullish sign for technical traders.
Looking at this chart, it appears that we are essentially in a 300 pip range, with the 1.1350 level underneath offering a bit of a “midpoint” between the two major levels. As we have crossed the 200 day EMA, pulled back to test it, and then bounced again, it’s a pretty bullish sign in general. However, if we were to break down below the 1.1350 level, the market could very well drift lower at that point, perhaps reaching down to the 1.12 level. However, the action on Monday does give us hope for a bullish run. Beyond that, the Swiss franc is getting sold off against several other currencies right now, so it makes sense that we should continue to see this pair grind higher. If we were to break above the 1.15 handle, then this pair could start to rally to more historically normal levels. Expect choppiness and a slow move, but it certainly looks as if the buyers have returned.
