Bulls Eye a Weaker CHF as EURCHF Approaches Key Suppor

Economic

Central Bank

Summary:

This retracement is approaching the 200-period moving average on the 2-hour chart, a technical level that could attract buyers looking to take advantage of potential CHF weakness.

BUY EURCHF

Close Time

CLOSED

0.95758

Entry Price

0.96350

0.95100

0.93673 +0.00011 +0.01%

65.8

Pips

Loss

0.95100

Exit Price

0.95758

Entry Price

0.96350

On Thursday, the Swiss National Bank (SNB) lowered its key interest rate by another 25 basis points as Switzerland’s economy continues to struggle with subdued inflation.

“With today’s rate adjustment, the SNB is ensuring that monetary conditions remain appropriate, given the low inflationary pressure and the heightened downside risks to inflation,” the central bank stated.

The SNB reaffirmed its commitment to monitoring economic conditions closely, emphasizing that it stands ready to adjust policy further if needed “to ensure that inflation remains within the range consistent with price stability over the medium term.”

This decision brings the bank’s main interest rate down to 0.25%. The move had been widely anticipated, with market participants previously pricing in a more than 70% probability of a quarter-point cut.

With this adjustment aligning with economists' expectations, traders now anticipate a pause in further rate moves as the SNB assesses the evolving global economic landscape. Chairman Martin Schlegel highlighted that uncertainties have increased "significantly," reinforcing the bank’s cautious approach.

Meanwhile, European Central Bank (ECB) President Christine Lagarde addressed the European Parliament's Economic and Monetary Affairs Committee on Thursday. She warned that if the U.S. proceeds with 25% tariffs on European imports—an action previously threatened by former President Donald Trump—it could reduce eurozone GDP growth by approximately 0.3% in the first year, according to an ECB study. The report also indicated that retaliatory tariffs from the EU could exacerbate the impact, pushing the contraction closer to 0.5%.

Concerns over a weakening eurozone economy could weigh on the euro (EUR), as they may prompt the ECB to accelerate interest rate cuts. However, Germany’s recent pivot away from over a decade of strict fiscal policy—aimed at stimulating domestic consumption and increasing defense spending—could help counterbalance some of the potential trade-related downside risks.

Regarding inflation, Lagarde noted that EU retaliatory measures and a weaker euro could lift inflation by roughly 0.5%. However, she expects this effect to be temporary, as slower economic activity would likely suppress inflationary pressures in the medium term. Bulls Eye a Weaker CHF as EURCHF Approaches Key Suppor_1

Bulls Eye a Weaker CHF as EURCHF Approaches Key Suppor_1

Technical Analysis

EUR/CHF has pulled back to 0.9531 from its recent high of 0.9663, following a strong bullish move driven by Germany’s decision to raise its debt ceiling. This retracement is approaching the 200-period moving average on the 2-hour chart, a technical level that could attract buyers looking to take advantage of potential CHF weakness.

The Relative Strength Index (RSI) has dropped to 29, entering oversold territory. Notably, this decline coincides with a bullish divergence, as price levels remain higher than the March 10 low of 0.9491, while the RSI is lower. This setup suggests that bearish momentum may be fading, increasing the likelihood of a renewed upside move.

If buyers step in, EUR/CHF could regain bullish momentum, with initial resistance levels around 0.9600. However, a break below 0.9500 could expose further downside risks. Traders will be closely watching price action around these key levels to gauge the next move.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9574

Target price: 0.9635

Stop loss: 0.9510

Validity: Apr 01, 2025 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

News

Analysis

User

24/7

Economic Calendar

Education

Data

Bulls Eye a Weaker CHF as EURCHF Approaches Key Suppor

Technical Analysis

Risk Disclosure