- The EUR/CHF remains caught in a descending triangle pattern, with the price consolidating around 0.9300.
- The euro is still under pressure against the Swiss Franco due to the bearish structure.
- Momentum indicators continue to reflect that the bearish trend remains intact.
The euro (EUR) is being negotiated in a narrow range against the Swiss Franco (CHF) on Tuesday, with the price action consolidating near the mark of 0.9300.
At the time of writing, the EUR/CHF remains inside a well -defined descending triangle pattern. The price currently remains above the support at 0.9293, the base of the triangle. A rupture confirmed below this level would present the minimum of May at 0.9280.
In the daily chart, the technical panorama remains bassist, characterized by a constant sequence of lower maximum and minimum.
If this area breaks, a greater fall towards 0.9224 becomes increasingly likely.
On the contrary, an upward movement that breaks above the immediate resistance at the Fibonacci recoil level of 23.6% of the maximum of March and the minimum of April, around 0.9327, could change the feeling in the short term.
Beyond this, a resistance confluence is about 0.9352, where the descending trend line is crossed with the simple mobile average (SMA) of 20 days, followed by the 50 -day SMA at 0.9360. The relative force index (RSI) in the daily framework is 41, indicating continuous bearish pressure without indicating overall conditions, leaving room for an additional fall before a technical rebound becomes probable.
EUR/CHF daily graphics
The 4 -hour graph reinforces the broader bassist trend, showing that the price action continues to respect the line of descending trend and negotiating below the SMA of 20 periods and the SMA of 50 periods, currently at 0.9311 and 0.9328, respectively.
These dynamic resistance levels limit any bullish attempt.
The pair remains supported just above 0.9293, with additional horizontal support at 0.9280, both have been tested multiple times. This grouped support zone indicates that the market is at a critical crossroads, with sellers fighting for forcing a clean break.
However, if the bassists manage to push below 0.9280, it could trigger an accelerated fall towards the following important support in 0.9224. On the other hand, a rupture above 0.9328–0.9330, followed by a closure above the descending trend line, would weaken the bearish structure and could start a movement towards 0.9495, aligning with the level of fibonacci setback of 61.8% of the fall of March-April.
4 -hour EUR/CHF chart
EURO – FREQUENT QUESTIONS
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
