EUR/CHF drops to lowest level in two years, test 1.1000
|- Lower interest rates across the globe continue to support the Swiss franc.
- EUR/CHF hit levels under 1.1000 for the first time since July 2017.
The EUR/CHF pair is falling on Monday for the third-day in-a-row as the Swiss franc remains the top perform among European currencies. Ir recently bottomed at 1.0998, the lowest in two years.
From the lows, it bounced to the upside, and it was trading at 1.1005/10, down for the day but back above the 1.1000 area. A consolidation below 1.1000 appears to be needed in order to clear the way to more losses. On the upside, the 1.1050/55 zone has become a key resistance.
From a fundamental perspective, the Swiss franc continues to be supported by expectations of monetary policy easing. On Thursday, the European Central Bank announces its policy decision. It is widely expected to keep interest rates on hold. Some are expecting a change in the forward guidance to hint at a rate cut. Next week, the Fed is seen cutting rates by 25 bp.
Technical outlook
“EUR/CHF has eroded the 1.1057 June low and has dropped into 23 month lows. We note the 13 count on the daily and that the weekly RSI has not confirmed the new low, but we maintain a negative bias while it remains capped by the current July high at 1.1172, which remains key”, said Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank.
They are looking for ongoing losses to the 1.10 psychological support. “Failure at 1.1000 will target the 1.0666/23 longer term, this is the 38.2% retracement (of the move from 2015-2018) and the June 2016 low.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.