EUR/CHF continues to balance slightly above the short-term upside support line taken from the low of the 29th of May. Until the line remains intact, the near-term outlook could remain positive. But once the support line is broken, we could then start examining a potential change in the short-term trend. That said, because the support line is not broken yet, we will stick to the upside for now.
If EUR/CHF decides to bounce from the aforementioned upside support line and makes its way back up to the area between 1.1670 and 1.1680, then we should stay cautious, as this where the bulls and the bears could start battling it out over the faith of the pair. If the bulls take the driver’s seat, then a move above the 1.1680 level could open way towards the 1.1710 level, marked near the highest point last week. If that level is not able to withhold, a move higher could lead to a test of the 1.1770 zone, marked by the peak of the 22nd of May.
On the downside, if eventually a break of the upside support line happens, for us to turn to the bearish side, we would also need to see a break of the round 1.1600 area. This could confirm a change in the short-term trend and we could then start examining lower levels like 1.1550 that could act as a potential good area of support. If that level is not able to resist the downside pressure, then we could start aiming for a test of the psychological 1.1500 hurdle.
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