EUR/CHF: Rallies should be short lived – Natixis

FX Trends Daily note by Natixis says a downside bubble is emerging on the daily chart of EUR/CHF and thus rallies should be short lived.

Rationale

A downside bubble is emerging on the daily chart and the weekly indicators have turned bearish. Against this backdrop, rallies should be short lived and a return above the 1.0730 barrier (daily parabolic) appears unlikely.

We’d better watch the supports at 1.0620-1.0634 (weekly Bollinger lower band and declining trendline). A break of these thresholds would unleash added downside potential to 1.0580 (Fibonacci extension), to 1.0540 (Fibonacci extension) and 1.0486 (50% Fibonacci extension of the 0.9774-1.1203  wave).

The resistances are at 1.0708, at 1.0730, at 1.0766, at 1.0820 and at 1.0860.