The EUR/CHF is trading well under its 200-EMA (1,2287) and a clear daily close below that level, would put the pair “under pressure” further. While we are ahead of no SNB news, the pair seems to lose its steam after the new political drama in Italy. News wires mentioned that ECB's Coeure said that “the ECB's forward guidance was a response to steepening rates. Guidance expected to keep volatility in check.” Last but not least, apart from the fact that today we are ahead of Euro zone confidence indices and German CPI, traders should also have in mind that SNB’s cap at 1.20 is still well supported and SNB has the tools to apply in order to defend its monetary policy.
Technical Outlook and Strategic Bias on EUR/CHF
Karen Jones, Head Technical Analyst at Commerzbank suggests that “the EUR/CHF is trading below its 200 day moving average at 1.2305 and is under pressure. Failure here introduces potential to test the 1.2250 2013 uptrend. This is expected to hold the downside and prompt recovery. Note the 55 week ma is also located here at 1.2245.”
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