EUR/CHF attempting to set a bottom at 1.0635 one-month low

• EUR/CHF finds support at 1.0635 to trim losses after a four-day decline and return to 1.0675.
• The euro appreciates amid a more positive market sentiment.
• EUR/CHF downside expected to be contained above 1.0610  – Commerzbank.

The euro appreciated about 0.3% on Monday to end a four-day negative streak that pulled the pair to one-month lows at 1.0635. The pair has been going through a steady recovery, fuelled by a more positive market mood and a solid appreciation of the EUR/USD, reaching day highs at 1.0675.

The euro picks up as market sentiment improves

In absence of relevant macroeconomic releases, the euro has managed to push higher against the Swiss franc, buoyed by investors’ optimism following EU leaders’ agreement on Friday to take action in order to support the worst COVID-19 hit countries.

Although the final decision about the specificities of the stimulus program has been delayed until a meeting in a still, to be determined date in July, the market seems to have assumed that the differences between country members will not be an insurmountable hurdle.

EUR/CHF: 55-day ma at 1.0610 to hold the downside – Commerzbank

On A longer-term perspective, Commerzbank’s Karen Jones, expects the pair’s downtrend to be contained above 1.0610 and attempt a recovery towards 1.0883 and 1.0915, “The 1.0653 end of March high is being eroded, but the market is expected to stabilise between current levels and the 55-day ma at 1.0610. Provided this holds the downside, scope will remain for recovery to the 2018-2020 downtrend at 1.0883 this week and the 1.0915 June high. A close above here will target the 1.1058/75 October 2019 high and the 38.2% retracement down from the 2018 peak. Above here would target the 200-week ma at 1.1146.” 

EUR/CHF key levels to watch