GBP/EUR: Pound Rallies Ahead Of BoE Announcement

EUR/CHF was trading strong last week hitting a near two-month high of 1.0838, but it later lost the momentum and closed the weekly candlestick with a Doji pattern – indicative of the indecision among the investors. Its Relative Strength Index also remained flat above 50, confirming the pause in the momentum.

The EUR/CHF had rebounded from the 50-day average, in mid-July, and then moved up to the current trading zone of 1.0701-1.0811. But, the recent failure to move further up even after repeated tries raises questions on the pair’s strength.

If EUR/CHF slides below the lower end of the current trading zone, the weekly support level of 1.0605 will be in play. It is also the support line from the March high.

Alternatively, if the pair manages to close above the upper area of the trading zone, it will push to the monthly resistance level at 1.0962, also the resistance line from the July 2019 low.

EUR/CHF came-off from the downward sloping trendline from August 6 high, at 1.0822, suggesting a weakened bullish mood.

To summarize, the bullish tone is still in place, but a break below the trendline from July 24 low at 1.0712 will test the bulls’ strength. If the pair breaks 1.0679, then 1.061 will be under attack. A break above 1.0838 will push EUR/CHF towards 1.0911.