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The euro initially fell during trading on Wednesday against the Swiss franc, perhaps in a sign of more“risk off” behavior. That being said, the market is likely to continue to see a lot of noisy behavior, due to the fact that a lot of traders out there simply do not have any idea what to do with risk appetite at the moment. After all, the market is a lot to deal with at the moment, not the least of which would be the potential for tariff awards.
Remember, the Swiss franc is considered to be a“safety currency”, and it is an environment right now that a lot of people are concerned about, but we also have the Swiss National Bank releasing its latest interest rate decision on Thursday, and that obviously will have a major influence on what happens with the Swiss franc. It is known that they are expected to cut interest rates by 25 basis points, but it will be press conference in the statement that people will be paying close attention to get an idea as to what the Swiss might be doing going forward.
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It's worth noting that the 50 Day EMA has broken above the 200 Day EMA and the last couple of sessions, kicking off the so-called“golden cross.” This is an indicator that a lot of people pay attention to longer-term moves, and the moving averages are sitting just below the crucial 0.95 level, an area that would be massive support not only due to the psychology of it, but the fact that it had previously been resistance. In other words, I do think the downside is somewhat limited, unless we get some type of financial concern out there that has people selling anything that is even remotely attached to risk appetite.
EURUSD Chart by TradingView
The 0.9650 level above is an area that has been of significant resistance previously, and if we can break above there, then the market is likely to go much higher. At that point, we could even be looking at a move to the parity level, but that obviously would be the longer term outlook.
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