Buyers barely hanging on as price stays above the 100-day moving average
The pair may be a bit lower today, but it is once again testing the 100-day MA (red line) with sellers still unable to find a firm daily close below it. Yesterday's low reached 1.1707 but thereafter the pair bounced back and close right at the key level mentioned.
For now, this will be the pivotal area to look out for in the pair as a break below the 100-day MA and subsequently the 50.0 retracement level @ 1.1726 will open up a further move towards the 1.1660 level.
The thing about EUR/CHF is that there is a sort of behind-the-scenes support at play with the SNB and it's often times near the figure level that they come in. Sometimes they do so via USD/CHF, which hasn't been all too bad recently having just fallen from parity to 0.9967.
We haven't quite heard from the SNB just yet lately, so we'll have to wait and see how comfortable they are with the recent fall in EUR/CHF. But if anything, I'd reckon they wouldn't want the pair to fall too far, too fast.
Whatever the case is, for buyers risk can now be defined and limited by the key support areas mentioned above but it's tough to argue against the recent downtrend in the pair still. And with Italian assets continuing to be smacked, it's adding to a list of supporting factors for the swissie over the past week. A further bounce is needed in my view to justify a rebound back to the upside.
Otherwise, the trade would be to go with the break below the 100-day MA.
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