- Swiss franc drops across the board during the American session.
- EUR/CHF breaks consolidation range and jumps to test July highs.
The EUR/CHF pair broke to the upside after trading during days in a range between 1.0790 and 1.0735. It climbed to 1.0848, reaching the highest level since June 8. As of writing, it trades at 1.0840, up 65 pips for the day, having the best day in a month.
The move higher was triggered by a decline of the Swiss franc across the board without a clear reason. Other safe-haven assets like the yen and gold are lower but did not experience the slide like the Swiss did during the American session.
Technical outlook
The EUR/CHF broke a key short-term resistance, and it is testing the July top. Karen Jones, technical analysts at Commerzbank, points out the cross has eroded the 2018-2020 downtrend at 1.0818. “A close above 1.0838 is needed (favoured) to target the 1.0915 June high and the 1.1058 October 2019 high.”
At Commerzbank, they look for an imminent break higher. “The market will find initial support at the 1.0736 the mid-August low. The July low and the 78.6% Fibonacci retracement at 1.0607/1.0593 are regarded as stronger support that is expected to hold.”
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