The EUR/CHF has experienced what some technical traders may interpret as sideways action the past month. However, perspective is vital when examining this forex pair because of its magnified valuations due to the small price range it frequently trades within. The month of August produced a solid speculative month for traders who could take advantage of the EUR/CHF’s tendency to reverse higher after hitting important support levels.
Which raises the important question, if this recent slight bearish trend may be about to evaporate too? Since the middle of July, the 7.02000 to 7.45000 levels have produced frequent reversals higher and tested high watermarks above the 1.08200 junctures a couple of times. However, short term speculators may be trying to decipher if now is the time to test the bearish trend with additional selling positions of the EUR/CHF.
Technical speculators however may believe the recent downward action of the EUR/CHF is actually a bullish indicator and may suspect a reversal will develop near term. Part of the reason speculators may actually want to buy the EUR/CHF is that they believe there is more upside potential short term than downside momentum available. Meaning support has proven reasonably strong within the current price levels the EUR/CHF has exhibited and there is more room for upwards opportunity.
The support level of 1.07222 proved strong late last week. Certainly, if the EUR/CHF breaks this important level a test bearish sentiment could produce a run towards the 1.007100 juncture. However that may not be likely, and if the current price vicinity of the EUR/CHF sustains its current tight range near term and begins to incrementally raise the level of 1.07600 has proven a comfortable target higher for speculators which have seen movement above this value too.
Traders within the EUR/CHF need to understand the price movements within the pair are quantified with magnified increments because of the large amount of volume the forex pair enjoys. The EUR/CHR is a relatively comfortable trade for speculators, but they need to use their leverage wisely and practice patience to enjoy the movements the forex pair traverses. The EUR/CHF may prove an enticing buying opportunity short term if traders suspect that the recent bearish momentum cannot be sustained.
Swiss Franc Short Term Outlook:
Current Resistance: 1.07600
Current Support: 1.07400
High Target: 1.07800
Low Target: 1.07300
