EUR/CHF heads towards Wednesday's low of 1.1771
As Adam pointed out yesterday, flows away from Italian stocks into haven assets is helping to provide a boost to the swissie and today is no different. Italy's FTSE MIB is down by 1% - led by losses in banking stocks - and the swissie is staying bid.
There is of course other geopolitical factors that are helping the swissie's cause too with the US-EU dispute on Iran, the US-China trade rhetoric going nowhere, and NAFTA talks seeming at a stall at the moment.
And the euro side of the equation isn't really helping too with EUR/USD slipping back below 1.1800 again, which could be a stepping stone for sellers to pile on more pain in the euro.
A daily close below the 38.2 retracement level @ 1.1792 would be a good sign for sellers in EUR/CHF heading into next week. That would open up the way for a move to test the 100-day MA (red line) @ 1.1739 and the 50.0 retracement @ 1.1726.
A break of the former would put the bullish bias in the pair to the sidelines so that would be a key area of support for buyers to lean on. The last time the pair tested the 100-day MA was in March and it helped to stall declines before moving higher in a move that touched 1.2000 by the end of April.
That region of support will be one to watch and is an attractive level for buyers in my view, as risk can be very much clearly defined and limited - along with the proposition to hold up the bullish bias in the pair too.
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