June 8, 2021 12:27:25
While there’s much talk of low volatility in FX and stock markets with measures of price movement (Implied Volatility) back below pre-Covid levels, two CHF pairs are moving today.
EUR/CHF breaking down
EUR/CHF has been stuck in two sideways ranges for the last few months either side of the 50% retrace level of the April 2019 / May 2020 high/low move. The second, more recent range has seen a series of lower highs with any price rises being met with sellers at the 50-day SMA. Support around 1.0930 had remained very solid but the mild risk off theme this morning has seen the pair break lower through this support, so this now acts as strong resistance to any retracement.
The first target for the bears is the next Fib level at 1.0877 with the 200-day SMA just below here around 1.0866. Resistance lies at the bottom of the recent range (1.0930) with the 100-day SMA residing around 1.0962.
CHF/JPY bull flag in play
A flag pattern is a continuation pattern where the price action moves counter to the prevailing long-term price trend. Should the trend resume, the price increase can be rapid and break out after the short period of consolidation.
That looks to be happening in CHF/JPY today. After the break above the February high at 118.87 in late April, the pair moved higher in a neat ascending channel. The flag then developed towards the end of last month with an upside target near to 123. Stops can be placed below yesterday’s low at 121.46.