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EUR/CHF Breakout Accelerates with Markets Favoring Euro Over Franc
Traders' Opinions
Summary:
EUR/CHF extends its rally for an eighth session as technical buying, easing safe-haven demand, and widening ECB–SNB policy divergence lift the pair toward seven-week highs.
Buy
TradingEURCHF
EXP
0.93501
Entry Price
0.94400
TP
0.92700
SL
0.93393 -0.00044 -0.05%
0
Point
Flat
0.92700
SL
CLOSING
0.93501
Entry Price
0.94400
TP
The Euro extended its advance against the Swiss Franc on Tuesday, pushing EUR/CHF higher for an eighth consecutive session and reinforcing a strong bullish recovery that has been unfolding since mid-November. After bottoming near 0.9179, its weakest level since 2015, the currency pair has surged steadily and now trades around 0.9344, marking its highest level in nearly seven weeks. The move signals a clear reversal in sentiment toward the Franc, which remains under sustained pressure despite no major deterioration in Switzerland’s economic fundamentals.
Traders indicate that the latest climb in EUR/CHF is driven largely by technical buying and the unwinding of elevated long-Franc positions rather than a fresh wave of Eurozone strength. The Swiss Franc had been one of the best-performing safe-haven currencies through much of the year, but with speculative positioning stretched, markets are now rotating out of the overbought currency. This short-covering dynamic has allowed the Euro to regain ground even as Eurozone data continues to paint a mixed picture.
A subtle improvement in global risk sentiment is also weighing on the Franc. Investors have trimmed defensive exposure amid early signs of diplomatic progress in US-mediated discussions aimed at refining a potential peace framework for the Russia-Ukraine conflict. While any durable resolution remains far off, the mere appearance of constructive dialogue has been enough to reduce demand for traditional safe-haven assets, including the Franc. Broader equity and credit markets have also shown greater stability in recent sessions, further softening safe-haven flows.
Economic data offered little fresh impetus for Euro bulls. Germany’s updated third-quarter GDP figures released on Tuesday confirmed stagnation, with the economy registering 0.0% growth quarter-on-quarter and 0.3% year-on-year. The confirmation of flat growth avoided the gloom of contraction but did little to shift market expectations, leaving the narrative dominated by positioning and policy-driven forces rather than macroeconomic surprise.
The more influential driver continues to be the growing divergence between the European Central Bank and the Swiss National Bank. After implementing four rate cuts earlier in the year, the ECB has now held policy steady for three consecutive meetings. With inflation drifting closer to the ECB’s 2% target and forward-looking indicators stabilizing, policymakers have adopted a more neutral tone. Markets broadly expect the central bank to maintain this stance at the December decision, reinforcing the perception that the ECB is approaching the terminal point of its easing cycle.
The SNB, however, retains a more dovish posture. With its benchmark rate at 0% after two cuts this year, the central bank has reiterated its willingness to act again if inflation softens or if the Franc strengthens to levels that threaten domestic price stability. Yet, at the same time, SNB officials have acknowledged that inflation is likely to edge slightly higher in the coming quarters, reducing the urgency for immediate further easing. This combination—soft dovish guidance without imminent action—has weakened the Franc’s relative yield appeal and contributed to its recent depreciation.
The interplay of technical adjustment, shifting rate expectations, and improving market sentiment has produced a supportive backdrop for further Euro gains. The structural picture does not necessarily reflect newfound Eurozone optimism; rather, it points to a market reclaiming balance after months of one-sided strength in the Franc.
Technical Analysis
EUR/CHF continues to trade within a robust bullish trend, with recent price action confirming a breakout from prior consolidation phases. The pair is currently holding above the critical support zone near 0.9315, a level that previously acted as a base during sideways trading. As long as price remains above this area, the bullish structure remains intact.
A sustained rebound from 0.9315 reinforces the view that upward momentum is still in play. The immediate upside test sits near 0.9366, an area that has historically acted as a short-term ceiling. Beyond that, 0.9380 emerges as a psychologically significant barrier and a structural resistance level aligned with the broader trend. Should buyers maintain control, the pair may attempt a deeper extension toward the high-0.93s and potentially into the 0.94 zone.
Momentum indicators across intraday and daily charts continue to show improving strength, with the recovery from November’s multi-year lows aligning with both trend and sentiment-based signals. Only a decisive close below 0.9315 would threaten the bullish setup, exposing levels closer to 0.9270 and weakening the immediate upward trajectory.
TRADE RECOMMENDATION
BUY EURCHF
ENTRY PRICE: 0.9350
STOP LOSS: 0.9270
TAKE PROFIT: 0.9440
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