By FX Empire.com
The pair continued to hover within the same tight range with the start of a new week on Monday, where all the focus remains on the final plan to be presented by Europe on Wednesday’s summit, especially that the weekend meetings failed to produce concrete plans for the market to act on.
Investors remain upbeat that the summit might present something, and accordingly still fear selling the euro now, and prefer to stay on hold to see the final recommendations. The odds are narrowing for a major breakthrough by leaders and investors remain more skeptic, yet fear a strong rally at the same time and accordingly caution is what we can see now with hopes that they might present something strong, especially support for banks.
So far the market is realizing that the measures are already being priced in the market and that Wednesday will not trigger new revelations and accordingly the buying pressure will extend on the euro, leaving the lighter chance for a breakthrough which can see the trigger of stops if the euro does gain versus the dollar and that might move the EUR/CHF higher. In the meantime fear of the SNB action also limits the scope for the pair’s movement yet with stability above 1.22 we see that any failure to meet high market expectations for the summit has the room to send the pair to test the 1.20 floor.
Choppy trading will be evident on Tuesday ahead of the summit and with the lack of major fundamentals and accordingly we still see the EUR/CHF in a tight range with chances higher for the franc to gain grounds again amid the fear over the euro outlook.
Germany will report the Gfk Consumer Confidence for November at 06:00 GMT which is expected to weaken to 5.1 from 5.2.
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