4 Nov 2013
EUR/CHF hovers near its daily highs
FXstreet.com (Athens) – The EUR/CHF is heading higher since the kick off of the European trading session, inspired by better Euro zone’s data.
The EUR/CHF is trading near 1.2316 area well above its overnight opening in early Asian session (1.2299) but still being captured amidst the confluence of the 200 – daily SMA (1.2312), 50 – daily EMA (1.2321) and the 20 – daily EMA (1.2322) at the area as of 1.2312-1.2322. Traders might consider that after the better than expected Euro zone released data - regarding both the Euro zone’s Sentix Investor Confidence as well as the Euro zone’s PMI - the cross should move on the upper level. Reading between the lines, market participants should take into major consideration the fact that we are ahead of ECB’s decision and UBS analysts have mentioned through new wires that “expects ECB to cut its interest rates on the 7th November due to yesterday’s muted inflation”. On the other hand, an increasing number of analysts suggest that is more likely that on Thursday’s conference we will witness some pre-announcement of further lending operations, designed stem the fall in excess liquidity in the Euro zone (cash in the system over and above what is required).
Technical Aspects on the EUR/CHF
The cross should probably overcome the above depicted confluence to trade higher to the barrier as of 1.2387 (the downtrend line from July). On the bear side, a close below the 30-day SMA (1.2308), would probably drag the cross further downwards to the lower 30-day Bollinger Band at 1.2235. Karen Jones Head Technical Analyst of Commerzbank suggests that “a close above 1.2370 would imply further strength to 1.2415 September high and then 1.2435 the mid August high. The intraday Elliott wave count continues to imply that the downtrend will be challenged.”
The EUR/CHF is trading near 1.2316 area well above its overnight opening in early Asian session (1.2299) but still being captured amidst the confluence of the 200 – daily SMA (1.2312), 50 – daily EMA (1.2321) and the 20 – daily EMA (1.2322) at the area as of 1.2312-1.2322. Traders might consider that after the better than expected Euro zone released data - regarding both the Euro zone’s Sentix Investor Confidence as well as the Euro zone’s PMI - the cross should move on the upper level. Reading between the lines, market participants should take into major consideration the fact that we are ahead of ECB’s decision and UBS analysts have mentioned through new wires that “expects ECB to cut its interest rates on the 7th November due to yesterday’s muted inflation”. On the other hand, an increasing number of analysts suggest that is more likely that on Thursday’s conference we will witness some pre-announcement of further lending operations, designed stem the fall in excess liquidity in the Euro zone (cash in the system over and above what is required).
Technical Aspects on the EUR/CHF
The cross should probably overcome the above depicted confluence to trade higher to the barrier as of 1.2387 (the downtrend line from July). On the bear side, a close below the 30-day SMA (1.2308), would probably drag the cross further downwards to the lower 30-day Bollinger Band at 1.2235. Karen Jones Head Technical Analyst of Commerzbank suggests that “a close above 1.2370 would imply further strength to 1.2415 September high and then 1.2435 the mid August high. The intraday Elliott wave count continues to imply that the downtrend will be challenged.”