EUR/CHF trades below 1.1800, what's next?
The SNB won't be too happy with the way things are going in the last two days
Initial decline in the pair early May was stalled by support from the 23.6 retracement level @ 1.1874 but after the pair broke that level in yesterday's trading the pain continued into today.
With EUR/USD breaching below 1.1800 as well, it's making for a tough time for EUR/CHF to see a rebound. The SNB can take comfort from the fact that the pair can move towards 1.2000 given time, but will they allow it to run too far off? That we'll have to wait and see, but I believe that they would not take the risk of that.
In terms of levels to look out for in the pair, right now it looks like sellers have breached below the 38.2 retracement level @ 1.1792. The next support level seen is the 6 April low @ 1.1769 followed by key support from the 50.0 retracement level @ 1.1726.
Those would be levels for buyers to lean on in order to define and limit risk for another move to the upside. But given how the euro is in a sort of free fall mode right now, best be wary not to catch a falling knife. It's always better to be a bit late to board the train than to be the one trying to stand in front of it.