From the start of this month, the EUR/CHF has been making lower highs. And, this has resulted to a nice-looking descending triangle pattern. Will price break to the upside or to the downside?
The euro has been relatively calm even after the release of the ECB interest rate decision last week. No major economic report is scheduled to be released from the euro zone today, apart from the December’s French Industrial Production report. It is forecasted that the report will come out at -0.3% for the month. The figure came in at 0.5% in November. Because industrial production is regarded as a leading indicator of economic growth, waning production is normally interpreted as bearish for the domestic currency. Later in the week, the only major report that can cause some major movements in the euro is the release of the Q4 2012 Flash GDP on Thursday.
As earlier mentioned, technical analysis on the EUR/CHF reveals the pair is trading in a descending triangle pattern. Immediate resistance is found at 1.2300. A break of this could expose 1.2375. On the other hand, immediate support is found at the lower line of the pattern, at 1.2256. A break of this could expose 1.2222.
The pair is still trading in the descending channel pattern. Thus, the best case scenario is to wait for it to break out of this pattern, either to the upside or downside, before placing trades according to the technical analysis above.
DISCLOSURE & DISCLAIMER: THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY AND NOT TO BE CONSTRUED AS SPECIFIC TRADING ADVICE. RESPONSIBILITY FOR TRADE DECISIONS IS SOLELY WITH THE READER.