- The Euro has rallied a bit against the Swiss franc during the trading session after initially pulling back on Tuesday, and now it looks like we are trying to get to the 0.9450 level.
- If we can break above this level, then it's likely that traders will continue to look at this as a market that could really start to take off to the upside as we are at an extreme oversold condition.
- Breaking above the 50 day EMA, of course, is very bullish as well.
I think in that environment, we probably see the euro go looking to the 200 day EMA right around the 0.96 level. On the other hand, if we turn around and fall from here, then we just simply bounce around in the same consolidation area has a floor at the 0.93 level.
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The Floor
The 0.93 level has been crucial for quite some time, and I think will continue to be the floor in the market as it were. The question now is whether or not we can find enough support to turn things around for a bigger move. The European Central Bank has cut a couple of times but so have the Swiss and let us not forget that if this pair drops too much, the Swiss are well known to get into the market and start pushing it higher. They have no hesitation to manipulate the currency markets and intervene when things get a little too expensive for Swiss exports. I don't see why that would be any different here. And therefore, we've got a scenario where I think we are trying to find that bottom. And if we do in fact continue to go higher from here, this could be a longer term swing trade.
If that were the case, it makes a lot of sense that the markets will continue to see a lot of noise, but at this point in time, we are still trying to see whether or not the risk appetite scenario warrants the idea of the pair rising yet.
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