EURCHF rallies towards key long-term trendline resistance

The euro has enjoyed a period of strength in spite of a sharp decline in inflation, with the recent CHF outperformance reversing this past week. The decline in eurozone inflation (2.9% from 4.3%) and GDP (-0.1% from 0.1%) signal a high likeliness that the ECB are done with their tightening phase unless we see a spike in inflation (likely due to energy). In terms of EURCHF, there remains a significant chance that we see risk attitudes turn once again, with a risk off sentiment likely to drive this pair lower. With a clear bearish trajectory playing out over the course of the 2023 thus far, this latest rally has taken us into a deep retracement zone and descending trendline. With that in mind, there looks to be a high likeliness that we see EURCHF weaken from this region. Watch out for a potential bearish turn around trendline and the 76.4% Fibonacci resistance zone, with a break through the 0.96966 swing-high required to negate this 10 month downtrend.