Pullback to Key Support Creates Opportunities to Join the Prevailing Uptrend

Forex

Economic

Summary:

This could signal that the corrective move is coming to an end, leaving the bullish path as the path of least resistance.

BUY EURCHF

EXP

TRADING

0.92495

Entry Price

0.93000

0.92000

0.92650 +0.00188 +0.20%

0.0

Pips

Flat

0.92000

Exit Price

0.92495

Entry Price

0.93000

Producer prices in Germany continued to reflect moderate inflationary pressures during June. The Producer Price Index (PPI) increased by 1.8% year-on-year, marking its third consecutive month of growth, although slowing from the 2.2% recorded in May, which had been the largest gain since May 2023. On a monthly basis, the indicator pulled back by 0.3%, reversing the previous month's 0.3% increase and exceeding the 0.2% decline expected by the market.

On the other hand, macroeconomic fundamentals in the Eurozone continued to show mixed signals. The current account registered a surplus of EUR 25.1 billion in May, up from the EUR 17.5 billion observed in April and coming in above market expectations. At the same time, inflation measured by the Consumer Price Index (CPI) moderated to 2.8% year-on-year in June from 3.2% the previous month, in line with analysts' forecasts.

However, market attention remains focused on the rebound in energy prices. Oil has accumulated a gain close to 20% in July due to the intensification of tensions between the United States and Iran. The erosion of the temporary peace agreement, the resumption of the U.S. blockade on Iranian ports, and Tehran's attacks against vessels near the Strait of Hormuz have heightened fears over potential disruptions in global crude supply.

In this context, the main focus for investors will be the European Central Bank (ECB) monetary policy meeting scheduled for Thursday. Market consensus expects the institution to keep interest rates unchanged following the 25-basis-point hike implemented in June. Nevertheless, attention will be on the official statement and remarks from President Christine Lagarde for clues regarding the path of monetary policy in an environment marked by moderating inflation and rising energy prices.

In Switzerland, figures from the Swiss National Bank (SNB) showed that foreign exchange reserves rose to CHF 759 billion in June from CHF 711 billion in May, a development suggesting greater participation by the entity in currency markets to curb excessive appreciation of the Swiss franc.

For its part, the labor market showed a slight deterioration. The unemployment rate rose unexpectedly to 3.1% in June, reaching its highest level in nearly five years. This behavior reinforces expectations that the SNB will maintain an accommodative monetary stance over the coming months. Pullback to Key Support Creates Opportunities to Join the Prevailing Uptrend_1

Pullback to Key Support Creates Opportunities to Join the Prevailing Uptrend_1

Technical Analysis

EURCHF executed a pullback downward that has begun to find support upon touching the 100-period moving average located at 0.9225, while the 200-period moving average sits at 0.9218. If the price successfully defends the 0.9223 support level, we could see a renewed bullish impulse toward the 0.9300 psychological zone, an area that would serve as the immediate upside target.

Looking at the oscillators, the RSI managed to hold above the 40 level, from which the price has started to react upward, paving the way for bulls to regain control of the move from this area. Meanwhile, the MACD indicates a recent transition in the histogram to bullish, and the signal lines pulled back near the neutral zone before crossing upward once again. This could signal that the corrective move is coming to an end, leaving the bullish path as the path of least resistance.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9246

Target price: 0.9300

Stop loss: 0.9200

Validity: Jul 31, 2026 15:00:00

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Pullback to Key Support Creates Opportunities to Join the Prevailing Uptrend

Technical Analysis

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