EURCHF’s sharp sell-off yesterday has reasserted the bear trend for the coming days and weeks, according to David Sneddon and his team at Credit Suisse in London.
Sneddon says that the effect of yesterday’s decline was to remove Monday’s low and put in place a large bearish ‘rising wedge’ below 1.1670 (the late December low). As such, he says the spotlight now turns towards crucial support at 1.1388/74, which is the confluence of the October low, rising 200-day moving average and overlapping Fibonacci retracement levels (see Chart). A break below this level would he says be significant, with support thereafter seen at 1.1259 – the August low and the maximum measured objective from the bearish ‘rising wedge’ pattern.
Sneddon says resistance can be found at 1.1558, then 1.1596 and 1.1640. A close above 1.1640 would negate his bearish outlook, with resistance next seen at 1.1690/98.