With Tuesday’s recovery rally running out of steam during the overnight session, the Swiss Franc mayhave a difficult time regaining strong upside momentum without finding a fresh source of flight-to-safety support. Swiss deflation has been much more entrenched that their Euro zone neighbors, so last week’s ECB rate cut maylead to fresh easing measures out of the SNB over the near future. The December Swiss may fall back toward the108.68 area and still remains fairly vulnerable to a sizable downside move.
Technical Outlook
CHF (DEC): Daily stochastics declining into oversold territory suggest the selling may be drying upsoon. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market setup is supportive for early gains with the close over the 1st swing resistance. The next downside target is108.10. The next area of resistance is around 109.47 and 109.79, while 1st support hits today at 108.63 andbelow there at 108.10.