EURCHF: the last preparations before the referendum

EURCHF expectedly could not overcome the lower limit of its medium-term range of 1.15-1.20 and everything goes to the fact that the range trading will continue. And this means that the goal of the current movement is growth to the upper border, that is, to the area of 1.20.

What will act as drivers of this growth? From the point of view of the euro-component of this cross, these are the following points:
a) a certain reduction in the political tension in the Eurozone - the improvement of the situation in Italy and Spain;

b) market participants are waiting for the forthcoming meeting of the ECB and announcements about the beginning of the curtailment of the ultra-soft monetary policy;

c) good statistics from the Eurozone, published this week, sets up traders to a positive attitude towards the euro.

As for the franc, we continue to focus on the upcoming referendum. Yes, there are not so many chances for voting "yes" about the reform of the banking sector, but from this the potential reaction to the force majeure outcome only increases in a scale. That is, the franc is vulnerable. It is possible that on Friday some investors will decide to withdraw from the franc "just in case".

And this means that the conditions for the growth of the pair are now the most favorable. In this regard, we recommend buying a pair from current prices (with the possible increase of the overall position around 1.15, if the pair suddenly decides to return to this key support). The purpose of these purchases – movement to the upper limit of the range (1.20), where it is worthwhile to take profits. As for possible force majeure in the form of referendum results, in this case we recommend to set pending orders for breakthrough above 1.20 and profits in the 1.30 area.