Yesterday, EUR/CHF traded north yesterday as the market shifted back to “risk on”. The pair managed to take out a strong area of resistance at 1.1660 and then made its way towards levels last seen in May. Overall, the pair continues to trade above the short-term upside support line, drawn from the low of the 29th of May. All these put a positive spin on the near-term outlook and thus, we would expect to see EUR/CHF traveling higher again.
Because of the reasons mentioned above, we are sticking to the upside for now, until we see a break of the aforementioned support line. We can see that EUR/CHF is currently stuck between the 1.1685 and the 1.1710 levels. The last proved itself as good resistance yesterday. If the pair makes another attempt to test the 1.1710 barrier, a break of it could lead towards the 1.1770 area, marked by the high of the 22nd of May.
That said, we cannot exclude the possibility of EUR/CHF moving towards the 1.1660 hurdle, which acted as resistance just a few days ago. The rate could bounce back up from that level. As mentioned before, we will class any move lower, which stays limited above the upwards moving trendline, as a correction.
Alternatively, if we do see a break of the short-term upside support line, then we could start examining the case of a trend reversal. Below that trendline lies a key area of support at 1.1550, a break of which could open the path to the 1.1505 level, marked by the low of the 27th of June.
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