- Summary:
- As risk flows dry up from the Euro as a result of the stalled EU-UK Brexit trade talks, the EURCHF slumped today, with the downside expected to persist.
The EUR/CHF pair slumped to its lowest level in more than a month, as the UK and EU are yet to agree to a new Brexit trade deal, with the last ECB Meeting for the year just ahead.
Investors preferred to send their bids in to the Swiss Franc, choosing the route of fleeing to safety rather than extend risk plays on the Euro, as the UK and EU negotiations lie at a critical junction.
Reuters quotes Europe Minister Michael Roth as saying that there had been no “substantial progress” in the EU-UK talks.
These comments, reported by Reuters, dampened sentiment on the Euro further this Tuesday. The single currency is also finding it hard to beat out the USD on the day. With the ECB expected to increase stimulus in its Thursday meeting, the Euro may find itself swimming against strong market currents.
Technical Outlook for EURCHF
The expanding triangle on the daily chart of the EURCHF is usually a bearish pattern. This bearish expectation is playing out on the chart. After yesterday’s violation of the triangle’s lower border, the active daily candle looks set to confirm the pattern’s completion with a lower close. This opens the door towards the 1.07371 support, with 1.07211 and 1.06961 lining up as additional targets to the south.
On the flip side, only a break of 1.07915 allows the pair to retest the 1.08234 resistance (25 September and 11 November highs). The former rectangle pattern’s upper border forms another resistance target at 1.08500 (24 November and 4 December highs).
EURCHF Daily Chart
