The Euro slid down against its Swiss peer on Wednesday, taking the price to less than 1.2035, following the release of Swiss GDP Figure. This is the first time the Euro depreciated after the rejection of Swiss gold proposal. However, the price of the pair is floored firmly at 1.2000 by the Swiss National Bank.
As of this writing, the pair is being traded around 1.2034. Opened at 1.2036, the pair found some buyers during the early hours of Asian session taking the price up to 1.2041. But then the sellers jumped in and pulled the price back to 1.2034. On the upside, the pair may face a hurdle around 1.2057, the three week high and the confluence of 50-Day SMA and 38.2% fib level, as demonstrated in the following chart. On the downside, the 1.2000 floor will continue to act as a major support.
As demonstrated through the trend line in the above chart, the pair underwent a bullish breakout. The overall bias however is bearish because of lower highs on the daily chart. The bias will remain bearish unless the resistance around 1.2115 remains intact.
The Eurozone retail sales remained at 1.4% this October, more than that of 0.6% in the same month of the previous year, says the average forecast of different economists. As an indicator of economic growth, a high reading is considered to have positive impact on Euro and vice versa. Therefore, a better than expected figure may strengthen the bullish momentum in the price of EUR/CHF.
Gross Domestic Product
Exceeding the expectations 1.4%, the Swiss GDP for the third quarter remained at 1.9%, higher than 1.6% in the same quarter of previous year. Generally speaking, a high reading is considered positive for the Swiss franc. Therefore a better actual outcome spurred renewed selling pressure in the price of EUR/CHF.
Considering the overall fundamental and technical outlook, buying the pair around the 1.2025 support area appears to be a good strategy in short to medium term, the trade should however be stopped out on a daily closing below the 1.2000 floor level.
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