Hiyo FX men and women! Welcome to another week and month of forex trading! On today’s canvas is the daily chart of the EURCHF pair. As you can see, the euro has rallied against the Swiss franc after it hit a new historical low at on July 1. Notice that the pair has since traded within a rising channel. However, it appears that it has met some resistance at the 1.3800 market and at the 50% Fibonacci retracement line the I drew. If the pair falls below the support of the rising channel, it could once again revisit its historical low. But if the euro buying continues and the pair clears 1.3800, the 1.4000 price could be its next target. Though with the stochastics in the overbought region, I would be very cautious in buying the pair at this point. But that’s just me.
Well, the rally in the euro was pretty much fueled by a combination of profit taking on short euro positions, good economic data from the euro zone, and better-than-expected second quarter earnings of firms in the US and Europe. But with the lack of positive catalyst coming from the euro zone this week, the euro’s run could be cut short. Switzerland, on the other hand, will publish its year-over-year retail sales figure for the month of June today at 7:15 am GMT. Switzerland’s sales are seen to have grown by another 4.1% which is better than the 3.8% gain that it had during the previous month. Such growth or better would reflect positive on the Swiss economy and the Swissy.
Let’s see how it goes. Stay tuned!
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Interesting perspective. I have not really watched this cross but I think the Euro itself has more legs to the upside. I think positions have been light and as such it looks like we can run more.
Good article.
Banker
Hi Banker. A rise in the euro is actually beneficial for all in general as it denotes an overall confidence in the markets. So at the back of my mind, I hope that the euro continues its run as well.
The real economy is dead. Take a look at the recent small business optimism index which declined again in July. Small businesses cannot offset weakness in the US with international sales. Get ready for QE 2.
blackswaninsights.blogspot.com/2010/08/small-business-optimism-declines-great.html