- The Euro has risen slightly against the Swiss franc during fairly uneventful trading on Monday.
- It’s worth noting that we are stuck between two major moving averages at the moment in the form of the 50-day EMA underneath and the 200-day EMA above.
- All things being equal, though, this is a market that I think is still trying to sort out which direction it wants to go over the longer term.
After all, we’ve been consolidating since August of last year between the 0.9250 level at the bottom and the 0.9500 level on the top. The central banks both are fairly dovish and it’s probably worth to note that the European Central Bank is in a rate cutting cycle, but the Swiss National Bank recently cut by 50 basis points in a bit of a panic move.
Interconnected
You should always remember that these two currencies are highly interconnected because 85% of Switzerland’s exports end up in the European Union, while European traders will throw money into Switzerland when they are concerned about the economy in the European Union overall. In other words, this is a market that is highly sensitive to risk appetite. It tends to rise when there’s more of it and fall when there’s less of it.
The question now probably comes down to how aggressively the Swiss start cutting rates. If they get aggressive about it, then we could very well witness a breakout. But as things stand right now, I think we are more or less in a consolidation that we are not ready to break out of, although it’s probably worth noting that we have more of an upward bias or upward tilt, as it were, in this currency pair. Ultimately, I’d be a buyer of dips, but I don’t necessarily like the idea of trying to get too cute here. I would rather see more value in the euro at a lower level.
EUR/CHF Live Chart
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