Keep in mind that the pair also is a great indicator of risk appetite, going higher when people are feeling much more comfortable, and going lower when they are not.
The parity level sits right around the same area as the 200-Day EMA, so it is worth noting that the area could be very difficult to get above. After all, there’s a lot of psychology when it comes to the parity level, and of course, the breaking above there would have a little bit of momentum coming into the Euro. You could also say the same thing if we break down below the 50-Day EMA, which is currently right around the 0.98 level.
In the meantime, this could be a very sideways market, so you have a short-term range-bound trading system, this might be a good pair for you to be involved in. Keep in mind that the pair also is a great indicator of risk appetite, going higher when people are feeling much more comfortable, and going lower when they are not. Having said that, there is a lot of noise in this pair since the Swiss economy is so highly levered to the European one, and of course, we all know that the European economy has a major list of problems coming its way over the course of the winter.
At this point, even if you are not trading this currency pair, you do need to pay close attention to what it does next, because it could give you a bit of a “heads up” as to where risk appetite is going to be heading, and you can translate that as a secondary indicator on other markets that are highly sensitive to risk appetite. Ultimately, I would anticipate a lot of pressure building up in this market, but we probably have a big move coming in the next handful of sessions, one that we can follow for a bigger trade.
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