Reclaiming Support Could Trigger a New Upside Leg

Forex

Central Bank

Summary:

If the support zone continues to hold, the pair could resume its upward movement with the psychological 0.9500 level emerging as the next potential upside target.

BUY EURCHF

EXP

PENDING

0.94000

Entry Price

0.95000

0.93550

0.94515 +0.00330 +0.35%

Pips

PENDING

0.93550

Exit Price

0.94000

Entry Price

0.95000

The Swiss National Bank (SNB) left its benchmark interest rate unchanged at 0%, in line with market expectations. The central bank slightly revised its inflation forecasts higher and now expects consumer prices to rise by 0.7% this year and by 0.8% in both 2027 and 2028. Despite the upward adjustment, the SNB believes medium-term inflationary pressures have increased only modestly and continues to expect inflation to rise during the fourth quarter before gradually easing throughout 2027.

SNB Chairman Martin Schlegel stated that the recent depreciation of the Swiss Franc has been partly driven by widening interest rate differentials with other major monetary regions. He explained that Switzerland’s relatively low interest rates make the currency less attractive compared with the Euro and the US Dollar (USD). Schlegel also reiterated that the central bank remains prepared to intervene in the foreign exchange market if necessary.

Nevertheless, the SNB maintained a cautious view regarding the economic outlook. Policymakers continue to see global economic developments as the main source of risk for Switzerland, particularly amid tensions in the Middle East, uncertainty surrounding trade policies, and ongoing exchange-rate fluctuations. SNB Governing Board member Petra Tschudin noted that Swiss Gross Domestic Product (GDP) growth was exceptionally strong during the second quarter, supported in part by robust activity in the chemical and pharmaceutical sectors. However, the central bank expects growth to moderate over the coming quarters.

Germany’s latest IFO survey provided additional support for the Euro after exceeding expectations across all major components. The September Business Climate Index rose to 89.9 from 88.8 in August, reaching its highest level since May 2023 and surpassing the market forecast of 89.0. The Current Assessment Index also improved, climbing to 89.5 from 88.5 previously, while the Expectations Index increased to 90.4 from 89.0, beating the consensus estimate of 89.3 and signaling improving confidence in the economic outlook.

ECB policymaker Dimitar Radev stated that the central bank should allow more time for previous policy decisions to fully filter through the economy, emphasizing that the latest rate increase does not place the ECB on a predetermined path. He also noted that policymakers are not currently observing widespread second-round inflation effects, although inflation risks remain tilted to the upside while growth risks continue to lean to the downside.

ECB Governing Council member Joachim Nagel added that interest rates remain within what could still be considered neutral territory and suggested that a move toward moderately restrictive levels cannot be ruled out. Nagel reiterated his concerns regarding inflation, noting that underlying price pressures remain above desired levels. At the same time, he pointed out that higher oil prices have not yet generated significant second-round inflationary effects. Reclaiming Support Could Trigger a New Upside Leg_1

Reclaiming Support Could Trigger a New Upside Leg_1

Technical Analysis

EURCHF recently reclaimed the local support level at 0.9394 after briefly breaking below it. Following the downside break, price quickly recovered and staged a strong bullish rebound. The recovery allowed the pair to close back above the 200-period moving average, currently located at 0.9399, while also briefly reaching the 100-period moving average at 0.9425. If the support zone continues to hold, the pair could resume its upward movement with the psychological 0.9500 level emerging as the next potential upside target.

In the oscillator area, the RSI currently stands at 53 after recently falling to 25, a level that clearly signaled oversold conditions. Those extreme readings helped trigger the current rebound, and with the RSI now back in bullish territory, the recovery could continue to develop. Meanwhile, the MACD shows a bullish histogram that has been steadily gaining depth, while the signal lines continue to rise toward the neutral area. A bullish crossover above that zone would provide additional confirmation and could support a continuation of the upward move.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9400

Target price: 0.9500

Stop loss: 0.9355

Validity: Oct 06, 2026 15:00:00

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Reclaiming Support Could Trigger a New Upside Leg

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