EUR/CHF: support might hold
EUR/CHF has recovered from Monday’s lows just above 1.2400 but then met resistance at 1.2524 (May 15 high).
Trading the pair is extremely volatile these days due to the speculation that the Swiss National Bank may increase the minimal EUR/CHF level. Today Switzerland released worse-than-expected trade balance.
Some may think that the pair’s ready to top. Support is found at 1.2425, 1.2380/90 and 1.2350. Yet, if such speculation about higher EUR/CHF floor continues, it might settle above 1.2500. The next resistance levels are at 1.2550, 1.2600 and 1.2650 (last week’s high, 38.2% Fibo of the decline from 2007 to 2011).
UBS says that “so long as the support at 1.2370 holds, the risk is for resumption of upside.” Commerzbank also says that “the current decline is expected to hold in the 1.2400/1.2384 zone.” Crédit Agricole recommends watching Swiss Q1 GDP release on Thursday and May KOF economic barometer on Friday. The specialists say that “any move in EUR/CHF back to 1.24 should be bought into.”
Chart. Daily EUR/CHF