The EUR/CHF has held a tight range since March following the intervention by the Swiss National Bank, and the pair may continue to trade sideways over the near-term as investors weigh the outlook for future policy.
[B]Currency Pair:[/B] EUR/CHF
[B]Chart:[/B] 60 Min Charts
[B]Short-Term Bias:[/B] Flat
[B][U]Analysis[/U][/B]
The EUR/CHF has held a tight range since March following the intervention by the Swiss National Bank, and the pair may continue to trade sideways over the near-term as investors weigh the outlook for future policy. After slipping to a low of 1.4299 in October, the euro-franc snapped back to reach a high of 1.5885 on 12/15, but the lack of momentum to retrace the sell-off from the December high paired with the dovish policy stance held by the European Central Bank is likely to keep the pair within its current range over the remainder of the month. Over the next few hours of trading, we may see the pair push higher as market sentiment improves however, as the RSI approaches overbought territory, gains are likely to be capped, and we are likely to see the pair hold steady ahead of the German ZEW investor confidence survey. A significant rise in the ZEW index could lead the euro higher as the outlook for future growth improves however, as the ECB leaves the door open for another rate cut next month, expectations for further easing could weigh on the single currency over the next two weeks. Nevertheless, speculation for another intervention by SNB has certainly weighed on the Swiss franc, and mounting risks for deflation may lead policymakers to take additional steps to shore up the economy as the region faces its worst economic downturn in more than a quarter century. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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