EURCHF hits a multi-month low as weakening business activity warn of recession

EURCHF fell to the lowest since late September on Monday, after weaker than expected German / French / EU PMI’s in July sparked fresh acceleration lower.

Bears broke through lower base at 0.9605 zone, with close below this support to verify bearish signal for attack on nearby Fibo support at 0.9569 (76.4% of 0.9406/1.0097 advance, loss of which would open way towards 2022 low at 0.9406.

Firmly bearish daily studies support the action, adding to negative sentiment on weaker than expected business activity, which raises fears that Euro bloc will slip back into recession.

Weak data also point to strong negative impact from high interest rates, as the ECB meets on Thursday and expected to deliver another 25 basis points hike, in its continuous fight with inflation, despite the economic damage which tightening could cause.

Traders will also focus on signals the central bank will send about their near-future steps, with encouraging signals from easing of price pressures, though inflation is still 2.5 times above target, which is expected to keep the ECB highly alerted, but also pressured by two opposite forces.

Falling 10DMA (0.9641), which tracks the downtrend in more than three weeks, marks pivotal barrier which should cap upside attempts and keep bears fully in play.

0.9641; 0.9670; 0.9686; 0.9702
Sup: 0.9569; 0.9531; 0.9465; 0.9406