Swiss Franc Tanks Against Euro and the US Dollar. Where to for EUR/CHF and USD/CHF?

Swiss Franc, EUR/CHF, Euro, USD/CHF, US Dollar – Talking Points

• EUR/CHF has awoken from its slumber with a big move today
• USD/CHF has seen a decent jump, but perhaps a less dramatic one
• Volatility might be saying something. Is a trend emerging in EUR/CHF?

EUR/CHF TECHNICAL ANALYSIS

EUR/CHF saw a volatility breakout overnight, moving outside the six-month range of 0.9724 – 0.99955.

The price raced above the upper band of the 21-day Simple Moving Average (SMA) based Bollinger Band to make a high of 1.0023 today.

This might indicate the beginning of a new trend. A close back inside the band might signal a pause in bullishness or a potential reversal.

Today’s peak is just below the 260-day SMA that is currently at 1.0038 and it may continue to offer resistance ahead of the July 2022 high of 1.0073.

A bullish triple moving average (TMA) formation requires the price to be above the short-term SMA, the latter to be above the medium-term SMA and the medium-term SMA to be above the long-term SMA. All SMAs also need to have a positive gradient.

Looking at any combination of the 10-, 21-, 34-, 55- and 100-day SMAs and the criteria for a bullish TMA have been met. However, the price remains below the 260-day SMA. A move above it could signal that bullish is evolving.

On the downside, support might be provided at the breakpoints of 0.9955 and 0.9924 or the prior lows of 0.9817, 0.9789, 0.9764 and 0.9724.

Chart created in TradingView

USD/CHF TECHNICAL ANALYSIS

USD/CHF has been in a 0.9167 – 0.9409 range for a month with volatility decreasing, as illustrated by the narrowing of the 21-day Simple Moving Average (SMA) based Bollinger Bands.

The price tried to break below the lower band earlier this week but once it moved back inside the band it rallied over 1%.

The low seen on Monday at 0.9167 was below the March 2022 low of 0.9195 and the price ended the session back above that prior low. This may indicate a false break.

Monday’s low was also above the February 2022 low of 0.9150. These three levels might provide support. Further down, the historical lows of 0.9092 and 0.9087 could be a support zone.

On the topside, resistance might be offered at the previous highs of 0.9409, 0.9456, 0.9547 and 0.9591 The 55-day SMA is near one of those peaks at 0.9465.

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter