Intervention in the currency market by the Swiss Nation Bank push the EUR/CHF to a three-month high during the previous week, and the pair may continue to hold a broad range 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]
Intervention in the currency market by the Swiss Nation Bank push the EUR/CHF to a three-month high during the previous week, and the pair may continue to hold a broad range over the near-term as investors weigh the outlook for future policy. At the same time, the Shadow European Central Bank said that the Governing Council should lower the benchmark interest rate to 0.50% from 1.00% this week in order to jump-start the ailing economy, and speculation for an ECB rate cut could lead the pair lower over the near-term as the central bank continues to hold a dovish policy stance. After slipping to a low of 1.4299 in October, the euro-franc bounced back to reach a high of 1.5885 on 12/15, but the lack of momentum to build a base at 1.5270-80 (38.2% Fib) paired with fears of a deepening downturn in the global economy could lead the pair lower over the near-term. Nevertheless, as the SNB attempts to put a floor on the exchange rate, we are likely to see the EUR/CHF continue to find short-term support at 1.5090-1.5100 (50.0% Fib), and we may see the pair make another attempt to push back above the 38.2% Fib as market participants anticipate the ECB to hold a neutral policy stance going forward. A Bloomberg News survey shows 58 of the 60 economists polled forecast the Governing Council to hold the cash rate steady at 1.00% later this week, and long-term expectations for higher interest rates in the Euro-Zone could lead the euro higher over the remainder of the week. Over the next few hours of trading, a significant rise in German unemployment paired with a weakening outlook for Euro-Zone inflation could weigh on the euro-franc, and fears of a protracted recession could lead the pair lower to fill-in the gap from the 120 SMA at 1.5218. Be sure to check out other [Technical Reports](http://www.dailyfx.com/archive/technical) from DailyFX for additional information on the major currency pairs.
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