EUR/CHF has been selling off very aggressively but the pair might be due for a strong bounce soon, as it is currently testing a long-term bottom around the 1.2200 major psychological level.
Take note that this is 200 pips away from the SNB’s floor, which was implemented a few years back. Fears of intervention could trigger a sudden bounce, which might take EUR/CHF back to its recent highs around 1.2350.
At the same time, stochastic is indicating oversold conditions and the oscillator seems ready to make its way up. Going long at market with a 100-pip stop and a target of 1.2350 could be a 1.5-to-1 return on risk.
By Kate Curtis from Trader’s Way
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