Despite the ongoing consolidative mood, the cross is still expected to move to the 1.1057/66 area, noted Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank.
Key Quotes
“Even though EUR/CHF continues to range trade it still has the 1.1057/66 resistance area (June low, late July and October highs, 38.2% Fibonacci resistance) in its sights. Once reached, it may well once more cap, though. Only failure at the three month uptrend line at 1.0875 would leave attention once again on the 1.0812 September low. While we would allow for this to hold the initial test, failure here would put the June 2016 and January 2017 lows at 1.0632/23 on the cards”.
“In order to alleviate downside pressure, the cross will need to regain 1.1066 on a closing basis to generate some upside interest. We currently suspect that this will hold and a negative bias will remain entrenched below here”.
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