Fading Bearish Momentum Signals a Potential Shift in Control Toward the Bulls

Forex

Economic

Summary:

This indicates that bearish selling pressure is fading rapidly, while a bullish crossover of the signal lines appears imminent.

BUY EURCHF

EXP

TRADING

0.91391

Entry Price

0.92180

0.90800

0.91371 +0.00038 +0.04%

0.0

Pips

Flat

0.90800

Exit Price

0.91391

Entry Price

0.92180

The European Central Bank (ECB) elected to maintain its benchmark interest rates during its February policy deliberations, a decision that aligned seamlessly with broad market expectations. However, the accompanying rhetoric possessed a notably more hawkish undertone, as the governing council emphasized the underlying resilience of economic growth within the Eurozone. President Christine Lagarde appeared dismissive of the significance of recent inflationary moderation and brushed aside mounting concerns regarding the Euro's recent appreciation. She asserted that the common currency remains well-situated within its historical average range, signaling that currency volatility is not currently a primary concern for monetary policymakers.

Regarding broader economic activity, current estimates suggest that Eurozone GDP is on track to expand between 0.2% and 0.3% on a quarter-over-quarter basis, bolstered largely by robust domestic demand and a resilient services sector. Recent Purchasing Managers' Index (PMI) data indicates a narrowing performance gap between the Eurozone's core and periphery economies. While the manufacturing sector and industrial production continue to grapple with persistent structural weakness—exacerbated by periods of heightened volatility—analysts expect that fourth-quarter GDP figures will avoid downward revisions, despite the lackluster industrial output recorded in December.

Furthermore, final Composite PMI data for January suggests a marginal deceleration at the start of the fiscal year. Nevertheless, growth projections for the first quarter remain stable at approximately 0.2% inter-quarterly. Simultaneously, investor sentiment within the region experienced a remarkable recovery in February. The Sentix Investor Confidence Index surged to 4.2, up from -1.8 in January. This represents the third consecutive monthly advance, marking the highest confidence level recorded since July 2025 and reflecting a significant shift toward regional optimism.

The focus now shifts to Switzerland, where January inflation data is slated for release this Friday. The consensus anticipates that annual inflation will remain contained at approximately 0.1%. Against this backdrop, Swiss National Bank (SNB) President Martin Schlegel recently reiterated the challenges of a persistently low-inflation environment and a 0% policy rate. Schlegel reaffirmed the SNB's commitment to price stability within its 0–2% target range and signaled a clear preference for FX market intervention over further rate cuts, noting that the current policy stance remains appropriate given the expectation of a gradual inflationary pickup in the coming months. Fading Bearish Momentum Signals a Potential Shift in Control Toward the Bulls_1

Fading Bearish Momentum Signals a Potential Shift in Control Toward the Bulls_1

Technical Analysis

From a technical perspective, EUR/CHF recently breached the 0.9144 support level, momentarily striking a local low of 0.9096 before staging a sharp rebound. If the price successfully reclaims and stabilizes above the aforementioned 0.9144 level, this price action could be classified as a "shakeout." Such a development typically precedes a more pronounced bullish impulse, with the initial objective being the 0.9118 zone, representing a key local technical milestone.

The structural outlook is further defined by the 100 and 200-period Moving Averages on the 4-hour chart, situated at 0.9235 and 0.9268, respectively. These levels reside near the primary resistance zone and will act as long-term targets for the bulls. Currently, the 9-period Exponential Moving Average (EMA) is on the verge of being breached to the upside, coinciding with the recovery of the support floor. These combined signals suggest that a bullish move is gathering significant momentum from this value area.

Our momentum analysis via the MACD provides further confirmation of bearish exhaustion. We are observing a clear bullish divergence, with the histogram printing progressively smaller red bars with diminishing depth. This indicates that bearish selling pressure is fading rapidly, while a bullish crossover of the signal lines appears imminent.

Given the failure of the bears to maintain control below the local lows and the emerging technical confluence, long-side positions are increasingly favored in this zone. As the technical structure pivots, the bulls appear poised to take control of the narrative in the upcoming sessions.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9146

Target price: 0.9218

Stop loss: 0.9080

Validity: Feb 20, 2026 15:00:00

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Fading Bearish Momentum Signals a Potential Shift in Control Toward the Bulls

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