EUR/CHF is a slow moving pair, owing in large part to the Swiss National Bank’s decision to set a floor on the pair to protect the Swiss economy which is heavily reliant on trade with the Eurozone. The low volatility of the pair may be attractive to traders this week though, considering the heavy European event risk and the generally unsettled nature of markets following the Fed’s recent decision to leave the QE program untouched, for now.
The Euro looks well bid across the board and when combined with the attractive technical setup (and positive yield) of EUR/CHF, it may equal an attractive, stable long position for traders willing to be patient with a low volatility pair.
EUR/CHF is sitting just above the key 200 day EMA and just on some significant triangle support on the daily chart. A rally toward 1.24 resistance may be the beginning of a larger move higher, if the 1.24 level is broken. Such a rally would likely target the recent highs above 1.26.
There are some significant data releases scheduled for the Euro here early in the week, including major PMI numbers due out tomorrow (Monday) morning, so while the “normal” Euro crosses may be a bit volatile, EUR/CHF should be better insulated from data driven volatility, providing an attractive vehicle for Euro longs.
Written by: Liam McMahon, Currency Strategist – GlobalFxClub.com