EURCHF Archives - FaithMightFX

November 12, 2021November 12, 2021

EURCHF Is Set For A Rally

The EURCHF pair has maintained a support level at 1.05148 for over 5 years. Since the beginning of the pandemic in the year 2020, EUR has gained more than the CHF, as the price moved from the support level at 1.05148 in May 2020 to a new resistance level of 1.11540 in March 2021. From March of this year, the Swiss Franc appreciated against the Euro as price reached 1.05291, a few pips away from the support Level from the resistance level of 1.11540. The weekly chart shows a double bottom which might lead to the next rally, as $EURCHF appreciates.

On the other hand, the 1hr chart shows the price of $EURCHF has been ranging between 1.06741 and the support level of 1.05148 since the beginning of November 2021. A breakout of the range might occur if EUR appreciates against the CHF. RSI shows that the price has been overbought but no trace of the price being oversold before the next rally. A breakout of this month’s resistance level might push the price to the next major resistance level at 1.07034.

May 31, 2019January 22, 2020

Euro Rallying Against The Swiss Franc

EUR/CHF has been on a downtrend since mid-April. Price of EURCHF moved from 1.14522 to 1.12599. The resistance level has been maintained around 1.14217 since August 2018. Despite the recent downtrend, price has not exceeded 1.1320 for the past one week. From mid April to mid May, price of $EURCHF was in a range before the downturn began.

A breakout has occurred from the trendlines which might make the price of $EURCHF to go north. As we expect price to reach the resistance level at 1.14217, price of $EURCHF has since maintained the lower region of the Bollinger bands around 1.12793. RSI on the daily chart has shown an overbought position but has not been able to show an oversold position despite the downtrend. A likely reversal might have occurred since a breakout occurred today and an additional indication of Ichimoku showing a bullish future. Price could reverse to the resistanece level of 1.14217 from its current 1.12793 as the bulls take charge of the $EURCHF market.

May 24, 2019December 29, 2019

ON THE AIR with Futures with Ben Lichenstien

I ended the trading week this Friday morning on the TD Ameritrade Network talking as one of the guests on the Futures with Ben Lichenstein show. In light of the surprise resignation announcement of UK Prime Minister Theresa May hours before I went on, it isn’t any wonder that Ben and I discussed the Brexit, the implications of another prime minister resignation brought on by the Brexit, and what effects all of this will have on the forex markets.

We also talked about the rise of risk aversion in the markets and what that will mean for the U.S. dollar and Japanese yen as safe haven currencies. But the one safe haven that I did not mention this morning is the Swiss franc. Luckily, Dayo already wrote an analysis yesterday looking at the current trend in the $EURCHF. So read that and watch my interview below for an understanding of the new fundamental landscape in the forex markets heading into the summer trading months.

Lydia on TDA Network — Click the image to watch

May 23, 2019January 22, 2020

Euro Rallying Against The Swiss Franc

January 23, 2019February 24, 2020

EURO APPRECIATES AGAINST THE FRANC

In 2018, the $EURCHF from the weekly chart shows a downtrend. In the penultimate year, $EURCHF shows an uptrend after a range in 2016. $EURCHF moved from the highest level 1.9805 in April 2018 to the lowest level 1.11901 in September 2018. The Swiss Franc gained over 8000pips against the Euro in 2018. Since the second half of 2018, $EURCHF has neither broken the support level 1.11901 nor the resistance level at 1.15031. $EURCHF’s average movement since July 2018 has been 300pips.

An upward breakout of the resistance level could begin if many more EUR buyers get into the market. Since the beginning of this year, the $EURCHF has begun a bullish trend which might reach the resistance level 1.15031. The trendlines A and B have been broken though $EURCHF is yet to move to the upper region of the Bollinger band. The $EURCHF despite the bearish movement last year, it is yet to be oversold. There is a double-buttom on the weekly chart at the support level which technically signifies a bullish movement may begin. A reversal might occur due to EUR buyers getting into the market.

September 4, 2018

THE EURO, READY FOR A COMEBACK

The $EURCHF has been on a downtrend since mid-July. The downtrend came to an end at the early part of August with over 500 pips movement. After the bearish movement, it consolidated, making the EUR gain against the CHF with over 200 pips. Later, the downtrend continued. A new support level was formed towards the end of August resulting to a double buttom on the 4hr chart. The RSI shows it is already oversold at two different instances in the last one month. $EURCHF might go bullish with about 200pips movement.

On the daily chart, using the RSI, a double bottom has been formed which complements other indications. Though the future of Ichimoku shows a continuous downtrend but price has rallied around the oversold section since the beginning of the week. A bullish trend in favour of the Euro might resume.

January 15, 2015April 18, 2020

SNB Rocks The Whole World

The markets have been ROCKED this morning as the Swiss National Bank (SNB) just announced that they have abandoned the Swiss peg. After 2 years of active intervention in the currency market to hold the $EURCHF at 1.2000, with today’s announcement the SNB has effectively exited the forex markets. This is their 1st monetary policy announcement of 2015 and, while the rate announcement was scheduled, their decision was a major surprise.

The reaction from traders as the decision came down:

Jordan: SNB Exit From Franc Cap Policy Had To Be Surprise >> mission accomplished

— Katie Martin (@katie_martin_FX) January 15, 2015

We’re not even past January, and we can already give the Bullshitter of the Year Award to #SNB Jordan

— ?ukasz Abgarowicz (@abgarman) January 15, 2015

And the effect on the CHF pairs has been EPIC.

The SNB also cut interest rates today to -0.75%. With the abandonment of the currency peg, this interest rate cut was absolutely necessary. The CHF has long been a safe haven currency. Switzerland is considered a financial haven and tax shelter for the ultra-wealthy and has a relatively robust economy. During times of uncertainty, market participants buy Swiss francs. So when the financial crisis hit in 2008, the CHF and USD both strengthened considerably. But a strong currency is a stranglehold on the local economy as it dampens exports demand in the face of muted local consumer demand in 2008. The Federal Reserve enacted quantitative easing in response. The SNB combated the markets with a currency peg. With the peg now gone, the SNB understandably hopes that negative interest rates will dissuade the market from buying francs. However, uncertainty abounds, given the epic moves we are experiencing in the commodities markets, and I doubt even negative interest rates will stem the tide of CHF buyers now coming back into the market.

With the European Central Bank (ECB) due to announce their decision on monetary policy next week, “interesting” doesn’t even begin to describe the forex markets at this point. Everyone has a plan until you get punched in the face. Stay nimble traders.

Read also:

You’ll Never Beat Them. Join Them! (FaithMightFX)

Swiss National Bank discontinues minimum exchange rate and lowers interest rate to –0.75% (Swiss National Bank)

UPDATE: The article was updated to reflect the interest rate cut decision.

April 12, 2012

What Do You Do With 18 Billion Euros?

You sell them for other appreciating currencies.

It’s no secret that the SNB has been in the markets buying euros to maintain its 1.20 EUR/CHF currency peg. The euro, however, is a loosing currency to hold as it looses value in the face of its sovereign debt and political crises. To hedge against this loss of euro value and diversify its foreign reserves as it accumulates euros, a pattern, first noted by Credit Writedowns and included in yesterday’s digest, has emerged that the SNB sells its intervention euros for other, more valued currencies. And it looks like one currency of choice may be sterling.

EURGBP DAILY CHART — However, euro sells off versus the sterling post-intervention

Sterling strength has been mysterious to many traders because UK fundamentals are so poor (poor economy and tons of QE). Perhaps the SNB has been big buyer of sterling as it looks to quietly get rid of a devaluing euro that it is forced to buy. Now as $EURCHF is hovering around the 1.20 peg, I have to wonder if we’ll see a drop in $EURGBP when the SNB enters the forex market again. Some argue the SNB is already in the market.

OK, I step off my conspiracy theorist soapbox.