With the USD taking the limelight this week because of all the economic reports from the world’s largest economy, the EUR/CHF may not be on many people’s radars. But the forgotten currency pair could be among the non-USD pairs worth watching closely going forward because today it has taken out a downward-sloping trend line that had been in place since May 2013. This means that the long-term bearish trend has at least weakened, if not ended. Although it is a bit premature to say that significant gains will be on the way now, the potential is at least there. The SNB’s determination to defend the 1.20 floor virtually at all costs means the risk to reward profile for this pair is skewed positively. While this could be the start of the rally that many speculators had been waiting to witness for years, the only thing, apart from another move lower, they don’t want to see now is further long periods of consolidation. My bullish outlook on this pair will be invalidated on a potential break back below the 1.2140/30 area.
Figure 1:
Source: FOREX.com.
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