EUR/CHF – Fireworks and Long Term Perspective

EUR/CHF exchange rate is exploding higher, making a 4.5 Percent Move over the last six Trading days.

Usually, such price action involves significant announcements by central banks or a big surprise in new economic data readings.

However, the facts are already known for a while. The divergence between central Banks Monetary policy, interest rates and consistent economic improvement in Euro-Zone alongside inflation freeze in Swiss. The fact that EUR/CHF exchange rate in undervalued is known as well, since January 2015 SNB Thompson “Bomb” caused a flash crash.

With lack of new high profile information, looking at the market action, from market participant technical perspective, the big picture presents a technical Story:

The EUR/CHF Weekly interval chart shows a strong head and shoulder breakout pattern that was built up more than a year.

Investors still remember the 1.20 benchmark that was a solid market fact. With that in mind plus the Euro recent positive momentum, market participant hunger for fast profits generated a successful breakout, ignoring temporary resistance levels around 1.11 and 1.12 regions.

Going forward, the 1.15 mark will serve as a very strong resistance level, as profit taking process by early buyers will take place before the next trend development.

A reasonable price range to look at before a new catalyst will impact the market is seen between 1.13 and 1.15 with temporary price fluctuations.

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.