EUR/CHF Must Break 1.1118 to Resume the Uptrend

Summary:

The EUR/CHF is displaying a bullish flag, which in the opinion of Credit Suisse analysts, could lead to a uptrend resumption above 1.1118.

Credit Suisse’s analysts are maintaining a bullish outlook on the EUR/CHF, as they indicate that the pair is seen trading in a bull “flag” pattern. The bank thinks that 1.1118 is the critical upside barrier that needs to be broken to confirm this, with support being maintained at 1.0984/1.0963.

As a result of its bullish outlook, Credit Suisse maintains that in the context of the bull flag, the initial resistance to the upside move remains at 1.1064/1.1067. This could be followed by the 1.1118/1.1123 price level, after which the broader uptrend resumes with “a move to the 1.1152/58 highs initially and eventually beyond.”

The base for these moves remains at 1.1011, but a decline brings in 1.0983/1.0967 as this would reassert a top. Credit Suisse also sees a move to the 61.8% retracement at 1.0906/1.0897 as the next in line if the decline below the base continues.

This outlook comes as the Swiss National Bank (SNB) continues to maintain that it “remains ready to intervene in the forex markets due to a highly valued franc,” in response to the delisting of the agency from the US Treasury Department’s list of currency manipulators.

Technical Outlook for EUR/CHF

The daily chart displays the bull flag identified by Credit Suisse. The upside push to challenge the flag’s upper border could come from a bounce on the 1.10180 support (23 March low). The measured move from a successful breakout could put the EUR/CHF at 1.12624, with intervening barriers at 1.11254, 1.11502 (11 July 2019 and 2 March 2021 highs) and 1.11860 (10 September 2018 low) posing as threats to this move.

On the other hand, a breakdown of the 1.10180 support brings in 1.10019 and 1.09675 into the picture as potential downside targets. If the flag breaks down, then 1.08655 could become a potential downside target for the bears.