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EURCHF Back Above Parity Following Technical Breach

FOREX
  • While most major currencies traded with a subdued tone on Wednesday ahead of key US data on Thursday, the Swiss Franc has shown notable weakness following a key technical break higher for EURCHF.
  • EURCHF is up 1.12% approaching the APAC close and is the standout mover in today’s session. Continued Euro resilience has bolstered the pair however the move certainly seems technical in nature, following the break of a confluence of resistance levels. First of all, the 0.9925 December highs which sparked topside momentum and has now seen us trade above the July/Oct highs as well as pivot resistance at the March 2023 lows of 0.9972.
  • Decent follow through has seen the pair trade above parity for the first time since July 2022 with immediate resistance next seen at 1.0046, the July 04 high. Swiss weakness filtered through to USDCHF which reversed a solid portion of the losses incurred since last Friday’s US data.
  • Elsewhere, currency markets have picked up where they left off Tuesday with risk proxies moderately outperforming and EUR/USD holding well above the 1.07 handle and extending to fresh trend highs above 1.0760 on the US cash equity open before consolidating around this level.
  • AUD's 0.33% gains follow a modest beat on expectations for November CPI this morning, which edged higher to 7.3% Y/Y and 5.6% on a trimmed mean basis. This keeps a bullish theme intact, with the pair having cleared 0.6893, the Dec 13 high this week to confirm a resumption of the uptrend that started Oct 13. The focus is on 0.6976, a Fibonacci projection. Key support lies at 0.6688, the Jan 3 low.
  • Chinese CPI/PPI data is due overnight, however, markets may remain in a holding pattern ahead of Thursday's key US CPI release.
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