Euro, EUR/USD, EUR/CHF – Talking points
- EUR/USD upswing is intact for now but there are challenges ahead
- EUR/CHFhas seen a pullback but remains on firm footing for the moment
- Short-term momentum favours the Euro, but can it convert to further gains?
EUR/USD TECHNICAL OUTLOOK
After making a 2-year low at 1.08062 two weeks ago, EUR/USD has managed to gain some short-term bullish momentum as it crossed above the 10-day simple moving average (SMA) and it’s gradient is positive.
Further bullish momentum may unfold if the price is to cross above the 21-day SMA, but it would take a sustained rally above it to turn the gradient to a positive slope.
Nearby resistance might be at the recent peaks of 1.11212 and 1.11375. Further up, resistance could be at the previous highs and pivot points of 1.12743, 1.12802, 1.13751, 1.13959, 1.14830 and 1.14949.
The slight weakness of the last few sessions has the price nearing an ascending trend line, currently intersecting at 1.0995, a level of potential support.
Below there, the previous lows of 1.0891 and 1.08062 are potential levels of support.
EUR/CHF TECHNICAL ANALYSIS
Similar to EUR/USD, EUR/CHF made a 7-year low 2-weeks ago at 0.99728.
It has not traded at these levels since the Swiss National Bank (SNB) abandoned protecting the so-called “Swissy” from what it perceived to be overvaluation.
Yesterday’s price action saw EUR/CHF sneak below support at 1.02790 and touch the 10 and 21-day simple moving average (SMA) before bouncing back above 1.02790.
The next few sessions might be significant for the cross, as a continuation higher is a rejection of that attempt to go lower. While a decisive move below the 21-day SMA may signal short-term bullish momentum has evaporated.
To the downside, immediate support could be at yesterday’s low of 1.02646 which is also the current level of the 21-day SMA. Further down support may lie at the prior lows of 1.01550 and 0.99728.
On the upside, the 55 and 100-day SMAs are straddling the recent peak of 1.04024 and might provide a zone of resistance, as well as the prior high of 1.04480.
A pivot point at 1.05117 also has a descending trend line dissecting near it and could offer resistance. Above there the 200-day SMA is also near the February high of 1.06091, offering potential resistance.
— Written by Daniel McCarthy, Strategist for DailyFX.com
To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter