Dynamic Support and Trendline Bounce Offer Buying Opportunities

Manuel

Forex

Economic

Summary:

As price approached this region, the bullish rejection was clear, suggesting that the upward impulse could resume.

BUY EURCHF

EXP

TRADING

0.93527

Entry Price

0.93950

0.93150

0.93505 +0.00006 +0.01%

0.0

Pips

Flat

0.93150

Exit Price

0.93527

Entry Price

0.93950

Eurozone service sector activity indicators delivered a mixed picture throughout July. In Spain, the HCOB Services PMI posted an upside surprise, reaching 58.3 points to comfortably top both preliminary estimates and the prior month’s figure, pointing to a robust expansion in business activity. Germany's Services PMI saw a slight upward revision to 49.8 points, though it remained below the 50 mark that separates growth from contraction. Meanwhile, the German Composite PMI improved to 51.3, and the broader Eurozone composite reading climbed to 52.0 points, indicating a progressive recovery in private sector output led primarily by peripheral nations.

On the inflation front, price pressures demonstrated continued persistence. Headline Eurozone inflation ticked up to 2.9% year-over-year in July from 2.8% previously, while core inflation registered an unexpected bounce to 2.5%. These prints strengthen expectations that the European Central Bank (ECB) will keep a tight monetary policy stance in place over the coming months.

Economic output also continued to deliver positive surprises. Eurozone Gross Domestic Product (GDP) expanded by 0.4% quarter-over-quarter in the second quarter, doubling consensus estimates and marking its strongest expansion rate since early 2025. On an annual basis, GDP growth picked up to 1.0%, reflecting a steady improvement in regional economic health.

In Germany, preliminary figures signaled a resurgence in price pressures. The Harmonized Index of Consumer Prices (HICP) climbed to 2.8% year-over-year in July from 2.4% in June, hinting at firmer inflation persistence within Europe’s largest economy.

In Switzerland, consumer prices surprised to the downside during July. The Consumer Price Index (CPI) dropped 0.1% month-over-month, underperforming forecasts that anticipated a flat reading. The main drag on inflation came from transportation costs, which declined 0.4% on the month, contrasting with the 0.6% rise projected by market consensus.

Looking at individual components, domestic prices grew 0.5% year-over-year, whereas imported goods prices stayed flat compared to the previous year. This movement suggests easing pressure from imported energy costs, which had previously fueled price increases amid Middle Eastern geopolitical tensions.

The Swiss National Bank's (SNB) latest projection foresees average annual inflation at 0.7% for the third quarter. However, recent data suggests a milder path, with quarterly inflation tracking near 0.5%—roughly 0.2 percentage points below official projections. Lower fuel costs have served as a main driver of this slowdown, and if sustained, inflation could remain below the central bank's forecast targets. Dynamic Support and Trendline Bounce Offer Buying Opportunities_1

Dynamic Support and Trendline Bounce Offer Buying Opportunities_1

Technical Analysis

EURCHF remains in a strong uptrend that has recently formed a trendline. This structure is supported by the 100 and 200-period moving averages positioned at 0.9339 and 0.9327, respectively, which have provided dynamic support. As price approached this region, the bullish rejection was clear, suggesting that the upward impulse could resume toward 0.9395—a 0.618 Fibonacci expansion level that frequently acts as a target during fresh expansion phases.

Turning to the oscillators, the RSI currently sits at 58, leaving ample room to extend higher before reaching overbought levels. It recently touched 33, pulling near oversold territory before buyers quickly regained control, highlighting a lack of bearish momentum. Meanwhile, the MACD histogram is beginning to gain bullish depth as the signal lines rebound upward from the neutral zone, providing further evidence that the path of least resistance remains to the upside.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9351

Target price: 0.9395

Stop loss: 0.9315

Validity: Aug 21, 2026 15:00:00

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Dynamic Support and Trendline Bounce Offer Buying Opportunities

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