- EUR/CHF fades Monday’s advance and returns to 1.0740.
- CHF picks up pace after the EU agreed on the recovery fund.
- Upside remains limited by recent tops around the 1.08 level.
EUR/CHF is struggling for direction in the first half of the week, coming down to the 1.0740 region after climbing to daily highs near 1.0760.
EUR/CHF capped by 1.0800
EUR/CHF is trading within a neutral/bearish bias near the 200-day SMA (1.0731) following the softer fashion around the single currency on turnaround Tuesday.
Indeed, the euro met some selling pressure after the EU leaders reached a deal on the European Recovery Fund worth €750 billion. This fund is expected to mitigate the devastating economic effects of the coronavirus pandemic on some European economies. The fund will now need to be approved at the European Parliament and it consists of €390 billion in grants and €360 billion in loans.
In the meantime, the Swiss franc is expected to shed some ground in coming sessions as political concerns following the deal are now alleviated, opening the door to a potential move to July peaks in the 1.0800 neighbourhood.
EUR/CHF significant levels
As of writing the cross is gaining 0.02% at 1.0748 and a surpass of 1.0797 (monthly high Jul.16) would aim for 1.0818 (23.6% Fibo of the May-June rally) ahead of 1.0915 (2020 high Jun.5). On the other hand, the immediate support is located at 1.0716 (weekly low Jul.20) ahead of 1.0658 (55-day SMA) and finally 1.0601 (monthly low Jul.10).