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Price Action Suggests EURCHF Could Extend Its Recovery Rally
Central Bank
Economic
Summary:
The price appears to be gaining traction and could extend its upward move toward the 0.9430 area, provided it avoids a downside break below the recent lows.
Buy
CLOSEDEURCHF
End Time
0.93197
Entry Price
0.94300
TP
0.92200
SL
0.93485 +0.00113 +0.12%
315
Points
Profit
0.92200
SL
0.93512
CLOSING
0.93197
Entry Price
0.94300
TP
The European Union (EU) is reportedly weighing adjustments to its methane regulations for U.S. liquefied natural gas (LNG) as part of an effort to smooth trade relations, according to Reuters. The European Commission is said to be refining its proposal ahead of trade negotiations with the United States, seeking to defuse tensions and potentially stave off a new round of tariffs proposed by former President Donald Trump. Both parties have hinted that energy cooperation could serve as a cornerstone of a broader trade agreement.
In parallel, the European Central Bank (ECB) has now delivered six consecutive interest rate cuts, marking the seventh reduction since its easing cycle began in June 2024. With inflation in the eurozone continuing to edge closer to the ECB’s 2% target, investors are increasingly pricing in the potential for additional policy accommodation. Broader concerns about external shocks and a weakening global growth backdrop have further solidified the rationale for maintaining an accommodative monetary stance.
In its latest statement, the ECB reaffirmed that disinflation remains on track, but carefully avoided committing to a specific rate path. Instead, the central bank emphasized its data-dependent approach, pledging to reassess conditions meeting by meeting in light of what it described as a climate of “exceptional uncertainty.” Much of that uncertainty, officials noted, stems from the unpredictable nature of Trump’s evolving trade agenda, which continues to cast a shadow over Europe’s export-driven economy.
During her press conference, ECB President Christine Lagarde expressed concern that escalating global trade tensions could undermine eurozone growth, primarily by eroding export demand. Exports remain a critical pillar of the euro area economy, and any sustained drag could delay the region’s recovery.
Additional commentary from Governing Council member François Villeroy de Galhau suggested that inflationary risks related to global trade conflicts appear muted—possibly even skewing to the downside. Meanwhile, ECB policymaker Madis Müller explained that the latest 25-basis-point cut was largely a response to declining energy prices and increased tariff-related pressure. He also noted that interest rates have ceased being a restrictive factor for the economy, as underlying indicators continue to show gradual, if uneven, improvement. However, Müller warned that ongoing global fragmentation could eventually exert upward pressure on prices, especially if supply chains become more localized.
While Swiss markets remained closed for Easter Monday, the Swiss franc (CHF) gained strength in early trading. Mounting U.S.-China trade tensions have reignited fears of a global slowdown, prompting investors to seek refuge in safe-haven assets such as the franc. Interestingly, President Trump has temporarily exempted certain key tech products, many of which are manufactured in China, from the latest round of proposed reciprocal tariffs—a move seen by some as an attempt to ease market nerves.
Meanwhile, Switzerland’s trade surplus widened significantly to CHF 6.35 billion in March, up from CHF 4.8 billion in February—marking the largest monthly surplus since October 2024. The expansion was fueled by a 12.6% surge in exports, outpacing a 10.4% rise in imports, and further underscoring the strength of external demand.
Technical Analysis
The EURCHF currency pair is currently showing signs of a bullish rebound after respecting a long-term ascending trendline. On April 11, the pair recorded a recent low near 0.9220, but since then, bears have failed to push the price to fresh lows. This inability to break down suggests a potential shift in momentum, with bulls slowly regaining control.
The price appears to be gaining traction and could extend its upward move toward the 0.9430 area, provided it avoids a downside break below the recent lows. Notably, this upside level aligns with a zone of previous price congestion and lies just below the 100-period and 200-period moving averages, currently positioned at 0.9373 and 0.9470, respectively.
Furthermore, the 50% Fibonacci retracement of the previous downtrend intersects around the 0.9425 mark, adding to the confluence of resistance in that area. This enhances the likelihood that any ongoing pullback may continue climbing toward that cluster of key technical levels.
The Relative Strength Index (RSI) is currently hovering around 56, indicating a neutral stance. While not yet in overbought territory, the indicator suggests there’s still room for the rally to stretch further, especially in the absence of strong bearish catalysts. As long as price remains supported above its recent lows and continues to hold the ascending trendline, the pair could remain tilted to the upside in the near term.
Trading Recommendations
Trading direction: Buy
Entry price: 0.9321
Target price: 0.9430
Stop loss: 0.9220
Validity: Apr 30, 2025 15:00:00
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