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The euro initially pulled back on Thursday against the Swiss franc but has seen buyers come back into the picture to show signs of life.
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We’re hanging around the 50-day EMA which of course is an indicator that a lot of people will watch very closely.
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Just above we have the 0.92 level and the 0.92 level is an area that a lot of people will be looking at as potential market memory.
Keep in mind that this area has been both support and resistance and with that being the case I would expect a reaction. If we can break above there then the EUR/CHF pair is likely to go looking to the 200-day EMA near the 0.9250 level. If we fell from here the 0.9150 level could be support and if we were to fail from there then the 0.91 level is your next target.
Geopolitical Influence and Market Efficacy
Ultimately this is a market that I think continues to see a lot of questions asked about it but over the longer term I think you still have more of an upward proclivity due to the fact that the interest rate differential must certainly pay the bullish traders out there. The market getting good news coming out of the Middle East will help the euro because there are a lot of concerns about energy in the European Union.
If we do see a lot of the good news coming out of the Middle East suggesting that Germany is going to have plenty of energy, then you start to see the industrial base wake up again and that should have more money coming back into the EU overall.
This will of course continue to move on the latest headlines, but I do think we’re getting to the point where the negativity in the Middle East is somewhat limited. I think the market is just getting kind of tired of freaking out every time a headline comes out and each negative headline seems to have a little less efficacy when it comes to selling so I still think we go higher again.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
