Continues to Drift Lower Against Swiss Fra

The great thing about this pair is that it is essentially a risk barometer, meaning that the higher he goes the more risk appetite there is, and you can see that we have been drifting lower since 2021.

• The EUR/CHF has drifted a bit lower during the trading session on Monday, as there seems to be a little bit more of a run toward the Swiss franc in general over the last couple of days.
• It’s worth noting that we recently tested the parity level, and then broke down rather significantly. It’s also worth noting that near the parity level, we had the 50-Day EMA that offered a little bit of the ceiling.
• It is sloping lower, so it does suggest that we could see a lot of downward pressure going forward.

Advertisement

If we were to break down below the bottom of the candlestick for the trading session on Monday, then I think it opens the possibility of a move down to the 0.96 level, and then eventually the 0.95 level, where we had seen a lot of support previously. Nonetheless, this is a market that also has to keep in mind that there are a lot of concerns out there, so it does make a certain amount of sense at the Swiss franc would be attractive, especially against the Euro, which has the biggest problem facing it being the fact that it is involved in the European Union.

If we were to break above the highs of the last couple of weeks, that would be a very bullish site for the Euro, perhaps opening a move to the 1.04 level. The great thing about this pair is that it is essentially a risk barometer, meaning that the higher he goes the more risk appetite there is, and you can see that we have been drifting lower since 2021. Yes, there’s been the occasional bounce, but at the end of the day, those have been temporary in nature, and nothing more than that.

Rallies at this point that show signs of exhaustion will more likely than not end up being a selling opportunity, and therefore it’s likely that I will step away from the market if it does take off to the upside, and simply wait for sellers to come back in, or the short term “hot money” to leave the market. At this point, the Euro is not a currency I want to own, especially against haven currency such as the Swiss franc. Patients will be key as this pair does tend to move slowly.