EURCHF was lower by 0.30% as markets respond to increased lockdown restrictions in Paris and other major cities. There is also a nervous tone ahead of the two-day EU summit, which begins today and could see Brexit talks breakdown at Boris Johnson’s “walkaway” date and the CHF is gaining from safe have demands.
President Macron announced that the French capital and others including Marseille, Toulouse and Lyon, a 9 p.m. to 6 a.m. curfew, which begins at midnight on Friday. The U.K. is also adding to virus restrictions in London and other areas which will also begin on Friday. The measures are adding to fears of a second virus wave hitting global growth.
The EU summit in Brussels today begins two days of various topics but will also see the latest round of negotiations over the U.K.s proposed exit from the union. U.K. Prime Minister Boris Johnson had previously said that tomorrow was the cut-off date from talks, where the country would “walk away” without an agreement in place. Chief negotiator David Frost has said that a deal is still possible, but a stalemate could rattle markets as the December 31st deadline looms.
Tomorrow also brings core inflation figures from the Eurozone, which are expected to come in at 0.2%. The ECB has been on deflation watch lately with some members hinting at potential intervention in the currency market in order to remove deflationary pressures on the single currency. This collection of risks is the reason that the Swiss Franc has been bid higher on the day.
EURCHF is threatening a bearish close under the 50-day moving average today and this could open up a swift move towards the support at the 1.0600 level. Further support arrives at the 1.0500 level. On a bearish daily close, a stop could be placed above today’s bar. If you require assitance with with risk/reward and trade entry, then please consider the Investing Cube Forex Trading Course or one-to-one coaching.
