The EURCHF currency pair has been trading in a bullish channel for a month now and after almost hitting the 1.1500 resistance level last week, it has now retraced back toward the 1.1400 support again (1.1413 being the exact low today as of this moment).
Most importantly, the fundamentals are still in favor of EURCHF moving gradually
higher over the coming months. However, for the moment there are some downside risks mainly related to the situation in Italy.
Particularly this week could be the highlight of those risks as the Italian Government will submit their budget plan to the EU later this week. Although a rejection of the budget plan by the EU commision is unlikely, they will probably use hard words in their response.
This could pressure the Euro and the EURCHF pair to the downside
this week. But, barring any large escalation of the rhetoric and the whole situation, such dips to the downside are likely to be buying opportunities in EURCHF.
At the moment, it seems it's better to wait for the submission of the budget plan and the response from the EU first before entering new long positions. Then after we see the reaction in the market we can go ahead and look to enter long on EURCHF for a move toward the 1.1500 price area.
The technical
situation provides some specific price levels as described below:
