- The euro plunged during the early hours on Wednesday as we continue to see a lot of noise out there.
- Keep in mind that the euro traded against the Swiss franc a lot of times is a referendum on risk appetite with the euro of course, being more of a riskier currency than the Swiss franc, which is considered to be a safety currency.
We have been hanging around in the same range for a while now. So, the fact that we fell and then bounced back up in the air doesn't really surprise me because we are still very much in the midst of a consolidation. The 0.945 zero level above is potential resistance. And if we can break above there, then we could go look into the 0.95 level, which also will feature the 200 day EMA.
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On a Break Down…
If we break down from here, then we could see quite a bit of support down to the 0.93 level, an area that I think I would be interested in trying to pick up a small position. All things being equal, EUR/CHF is a market that looks like it is trying to form some type of descending triangle, but you can also make an argument that we are just simply going sideways at an area that has been massive support multiple times. It is because of this that I am waiting to break out of this range to put money to work, but…
If nothing else, I'd be all about trying to use this as a sign as to where risk appetite is going for other trades. All things being equal, this is generally a very choppy and noisy pair, but the question now is whether or not it will be more risk on going forward or if it gets risk off, allowing us to trade this pair waith a bit more in the way of clarity.
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