EUR/CHF Anchoring Away from the 1.20 Floor in Expansion Pattern

The EUR/CHF found support at 1.2030, above the “1.20 floor” that the SNB had pledged to support back in September 2011. Last week, the pair climbed above a declining channel in the 1H chart, but there was a throwback after testing the 200 hour SMA. Since then, the market has continued to anchor away from the 1.2030 low and 1.20 floor in an expansion pattern (support and resistance moving away). The key will be the support because a break re-opens 1.2030-1.20. Note that the RSI has been able to kiss 70, while unable to break back below 40, this shows persistent bullish momentum in the short-term, though not strong because the RSI only “kissed” 70 once. The market moved above the 200 hour simple moving average, and the lower MAs (100,55,21,8) are turning to bullish order.

The 4H chart shows that the rally is within the context of a larger declining channel. The resistance seen goes back to 12/27/2011 connected to the high and pivot on 1/6/2012. A break above this channel is one sign of reversal away from 1.20. Also, the RSI pushing above 60, and 70 should confirm bullish momentum for this outlook. The first target/resistance to monitor is the 1.2130 pivot.