Sellers are regaining near-term control
The pair is now at a session low on the day of 1.1263 and is moving back below the 100-hour MA (red line) @ 1.1270. Stay below and near-term bias turns more bearish again. The pair had a short-term reprieve yesterday trading up above 1.1300 but sellers defended resistance around 1.1310 to keep any upside move limited.
Couple with the fact that there is still ongoing trade tensions between US and China that are likely to escalate, geopolitical tensions are making for good reason for the swissie to stay bid – even if SNB intervention looks increasingly likely the stronger the swissie gets.
And with technical levels lending support, the case for further downside in EUR/CHF only gets more justified.
Right now, the daily support at 1.1260 will be the real key level to look out for as a firm break below that will give more conviction for sellers to drive the pair lower. And from the chart itself, it sure looks like a slippery slope to the downside once that level gives way.
Sellers will be eyeing a move towards 1.1000 in such an event and unless the SNB steps in, there is still good reason to believe that the pair has more room to the downside. With geopolitical tensions between US and China set to step up a gear, we also have Italy’s budget worries, uncertainty surrounding a Brexit deal, fears of contagion arising from melting emerging markets, and a potential future trade dispute between US and EU all among the geopolitical concoction and that makes for a very potent mix to underpin the swissie.