Franc meltdown continues as risk tones keep calmer in European trading

Technical Analysis

Author: Justin Low | eurchf

EUR/CHF climbs to 1.1050 levels, nearing the October 2019 highs

EUR/CHF D1 24-02
The franc is the biggest loser on the week so far in the major currencies space and that owes somewhat to a breakout in EUR/CHF as the pair climbs to its highest levels since October 2019 today, nearing resistance at around 1.1059.Invest in yourself. See our forex education hub.

The meltdown in the franc over the past two days is also helped by the turnaround in sentiment with US equities rebounding strongly after Fed chair Powell's testimony yesterday, and also as European investors are brushing aside the risk averse tones earlier.

Risk sentiment overall remains rather fragile but they are much improved at the moment as compared to Asian trading and the currency traders are running with that.

CAD/CHF D1 24-02
Another notable franc cross to watch is CAD/CHF as it extends a breakout from last week to fresh one-year highs - solidifying a break above the June 2020 high @ 0.7203.

Elsewhere, GBP/CHF has also posted a solid month of gains, trading up by ~700 pips in February as it nears 1.2900 and a test of long-term key resistance trendline:

GBP/CHF D1 24-02

With regards to franc sentiment, I'd still go back to EUR/CHF as the main driver but given the relative outperformance of the pound, GBP/CHF still has that going for it.

Hence, if EUR/CHF does break higher above 1.1059, it paves the way for further gains in franc crosses in the bigger picture, all things being equal that is.


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