Potential Selling Opportunities Emerge on Descending Trendline Rejection

Economic

Central Bank

Summary:

These averages align closely with the descending trendline; therefore, a failure to break above this area, accompanied by clear rejection price action, could offer downside opportunities targeting the 0.9180 zone.

SELL EURCHF

EXP

PENDING

0.92200

Entry Price

0.91800

0.92350

0.92145 +0.00067 +0.07%

Pips

PENDING

0.91800

Exit Price

0.92200

Entry Price

0.92350

During the ECB Forum in Sintra, European Central Bank President Christine Lagarde stated that risks to the economy are currently more balanced than they were a few weeks ago and rejected the idea that the Eurozone is facing a stagflation scenario. Likewise, she reiterated that the institution stands ready to act if necessary to ensure that inflation converges sustainably toward its target.

However, the latest consumer price figures reinforced the perception that inflationary pressures continue to moderate across the bloc, reducing the urgency for further monetary adjustments by the ECB. Preliminary data showed that the Eurozone Harmonized Index of Consumer Prices (HICP) slowed to 2.8% year-on-year in June, down from the 3.2% recorded in May and coming in below the market expectation of 3.0%. On a monthly basis, the indicator pulled back by 0.1%, following the 0.1% advance observed the previous month.

Moderation was also evident in core inflation, a measure closely watched by the ECB as it excludes more volatile components such as food and energy. Core HICP advanced 2.4% year-on-year, down from the previously recorded 2.6% and below consensus forecasts. In the monthly comparison, the indicator increased by 0.2%, slowing down from the 0.3% observed in May. The decline in headline inflation was mainly driven by the drop in energy prices, while the reduction in core inflation suggests that domestic price pressures are also beginning to lose momentum. This scenario has led markets to moderate expectations of further rate hikes by the ECB, limiting the single currency's upside potential.

Meanwhile, in Switzerland, the latest inflation data similarly pointed to more moderate price dynamics than anticipated. The Consumer Price Index (CPI) increased by 0.2% monthly in May, below the market consensus of 0.3%, while the annual rate held steady at 0.6%, missing expectations that anticipated an advance to 0.8%.

This contained behavior of inflation has allowed the Swiss National Bank (SNB) to maintain its monetary stance unchanged. Its President, Martin Schlegel, noted on Thursday that there is currently no need to modify interest rates, emphasizing that inflation within the 0% to 2% range remains fully compatible with the institution's price stability objective.

Nevertheless, monetary authorities continue to look favorably upon a further depreciation of the Swiss franc. Although the currency has accumulated a drop of nearly 4% against the U.S. dollar so far this month, SNB policymakers believe a weaker exchange rate would help support inflation and broader activity. Potential Selling Opportunities Emerge on Descending Trendline Rejection_1

Potential Selling Opportunities Emerge on Descending Trendline Rejection_1

Technical Analysis

EURCHF is currently trading within a bearish formation, bounded by a descending trendline above and a slightly sloped support line below. Following the recent move upward, the price has once again encountered dynamic resistance at the 100 and 200-period moving averages, which sit at 0.9210 and 0.9215, respectively. These averages align closely with the descending trendline; therefore, a failure to break above this area, accompanied by clear rejection price action, could offer downside opportunities targeting the 0.9180 zone.

Looking at the oscillators, the RSI has climbed to the 66 level, drawing close to overbought territory. However, we have not seen higher RSI readings since June 22—when the price was trading at higher levels than it is currently—indicating that buyers are losing stamina quickly. Concurrently, the MACD shows a bullish histogram that is already losing depth, meaning a downside crossover would confirm the potential of the move. With the signal lines tracking just slightly above the neutral zone, they could rapidly cross lower, adding technical weight to the broader downward movement.

Trading Recommendations

Trading direction: Sell

Entry price: 0.9220

Target price: 0.9180

Stop loss: 0.9235

Validity: Jul 17, 2026 15:00:00

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Potential Selling Opportunities Emerge on Descending Trendline Rejection

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