EUR CHF Weekly Outlook

From the looks of it, the pegging of the EUR CHF at 1.2000 by the Swiss National Bank appears to be doing what was intended. Since the September move by the central bank, this currency pair has not breached the pegged price level.

Technically, the Euro/Swiss is in a position to breakout to the upside over the last weekly swing top at 1.2473. This action will turn the main trend up and could trigger an acceleration to the upside. In addition to the strength indicated by the swing chart, the market is also holding a steep uptrending Gann angle at 1.2148. This angle is controlling the market’s short-term direction.

After camping out inside of the retracement zone created by the 1.3833 to 1.0068 range, the EUR CHF has clearly established support on the 50% price level at 1.1950. This leaves the 61.8% level as the next resistance point at 1.2395. This price is clustered with the main top at 1.2148. Although it appears as possible resistance on the chart, the fact that the Swiss National Bank has been defending its currency means that the momentum is pointing up. This should translate into a strong up move through this resistance cluster.

The big concern for traders this week will be the crisis in Europe. With Greece making trouble and the situation in Italy worsening what better time for traders to attempt another run at driving the Swiss Franc higher. Not! I don’t think that anyone wants to take on the SNB at this time. It seems pretty confident that its interventions and threats of interventions are working. This means that the way of least resistance is up for the EUR USD.