EUR/CHF is stabilizing after maintaining important support levels, hinting at a potential base formation. A strong position above 0.9290 might lead to further gains, according to FX analysts. The pair bounced back after touching the previous low of 0.9210, showing a gradual rise. It recently established a higher low at 0.9290, indicating a developing base pattern and a possible continuing rebound.

Key Objectives and Resistance Levels

The next targets are around the 200-day moving average near 0.9385 and the upper limit of the current range at 0.9430/0.9445, which acts as a resistance zone. If the pair cannot stay above 0.9290, there is a risk of a deeper downtrend. This information includes forward-looking statements with risks and uncertainties. The markets and instruments discussed are for informational purposes only and should not be seen as recommendations. The author does not hold positions in the mentioned stocks and has no business ties with the companies discussed. Both FXStreet and the author are not registered investment advisors and do not provide personalized recommendations. It’s important to do thorough research before investing due to associated risks, including the chance of total investment loss. With the pair stabilizing, we see this as an opportunity for bullish derivative trades with defined risk. The bounce from the low suggests sellers are ran out of steam, making this a favorable time to consider strategies that benefit from a possible upward move. We’ll use the key level of 0.9290 as our line in the sand for any tactical moves.

Fundamental Shifts and Technical Strategies

This technical view is backed by changes in monetary policy expectations. Switzerland’s annual inflation rate dropped to 1.4% in May, giving the Swiss National Bank a strong reason to cut interest rates again, which would weaken the franc. This development supports the idea of continued rebound in the currency pair. On the other hand, inflation in the Eurozone is more persistent, recorded at 2.6% in recent estimates. This difference indicates that the European Central Bank might take longer to cut rates compared to its counterpart in Zurich. Such a policy gap usually strengthens currencies and supports our outlook for potential gains. In response, we’re considering buying call options with strike prices close to the 0.9385 moving average target. This strategy lets us take advantage of a rise toward the upper resistance boundary while keeping our maximum loss to just the premium paid. It’s a controlled way to engage in the potential rebound noted by analysts. To mitigate the risk of a downturn, we’d also think about buying put options if the pair falls below 0.9290. Historically, this pair can be highly volatile after central bank policy changes, so having a strategy to profit from or hedge against a new downtrend is wise. This approach prepares us for either scenario. Create your live VT Markets account and start trading now.

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