The Euro spiked higher against the Swiss franc and paved way for more upside. The main reason for the same was the SNB introduction of negative rates. The EURCHF pair broke an important resistance area and opened the doors for more gains in the near term. So, I think buying EURCHF is a good idea moving ahead.
There was a bearish trend line on the daily chart of the EURCHF pair, which was breached after the news. The EURCHF pair also settled above the 1.2020-30 resistance area, which might act as a support later. If the pair corrects lower and trades towards the mentioned support area, then we can enter into a buy trade.
Initial target should be around the 1.2080 level, and final target could be around the 1.2140 level. Stop should be placed below the 1.20 level.
Reviewing recent events and trades
Yesterday, there were several important risk events lined up during the NY session. The most important one was the US CPI, which fell more than expected. The US dollar moved a touch lower after the release. However, there was another critical release lined up, as the Fed interest rate decision was scheduled. The outcome was as expected and broadly helped the US dollar to trade higher. There were some swing moves noted in the EURUSD pair. It traded below 1.2300 recently.
Fundamental Outlook for the day
Today, there was a big surprise as the SNB announced negative interest rates. The pairs such as EURCHF and USDCHF were seen trading higher after the release. Later today, the US initial jobless claims and the services PMI will be published. The market is expecting a rise in the services PMI. If the outcome comes in line with the expectation, then the US dollar might continue to trade higher. There are chances of more gains in the near term, as sentiment still favors the US dollar.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
