EURCHF is trending higher on its 4-hour time frame, with price testing support at the bottom of the rising channel around the 1.0400 major psychological level. Stochastic is indicating oversold conditions and is starting to move higher, which suggests that further gains are likely.
RSI is on middle ground but is on the move up, hinting that the uptrend could carry on. If so, price could climb up to the top of the channel near the 1.0550 minor psychological level. The moving averages also made an upward crossover, with the 100 SMA above the 200 SMA, indicating that the climb could resume.
Greek debt negotiations continue to pose an event risk for this setup, as European leaders are set to have an emergency meeting today. If the Greek government finally agrees to implement a set of reforms or the creditors relax their conditions, the euro could be in for a strong rally on news that the debt-ridden nation could avoid a default and stay in the region.
On the other hand, reports that no deal has been made could drive the currency pair lower and possibly lead to a break of the support at 1.0400 and further losses for EURCHF. There are no other reports due from the euro zone or Swiss economy today, with the next set of data namely the euro zone PMI readings due tomorrow.
Small improvements are expected from both France and Germany, as their manufacturing and services sectors continued to expand in May. Higher than expected readings could allow the euro to stay supported against most of its forex rivals but there’s still a chance that Greek debt updates might be bigger catalysts for price action.
Over the weekend, Greek officials said that they drafted new proposals for economic reforms and these could be discussed in today’s emergency meeting or in the EU Summit.
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