Bearish Signs in EUR/CHF With No Pivot Signal From SNB’ Jordan
UR/CHF has fallen below parity as the ECB starts giving dovish signals, while the SNB is keeping the rhetoric hawkish
EUR/CHF has been bullish since later September, but the pace of the trend has been relatively slow since November, which indicates that the CHF has been quite strong. In recent weeks we have been seeing some bearish reversing signs in fact, as the highs have been getting lower, followed by some steep reversals.
EUR/CHF made a high of 1.01 early last week although this level continued to offer resistance and we saw a reversal from there. The price slipped below the 200 SMA (purple) on the H4 chart, but buyers came back and pushed it higher again.
EUR/CHF H4 Chart – Sellers Testing the 200 SMA
The highs are getting lower
Although buyers failed to push this pair above 1.01 and we have seen two bearish legs since then. The first took the price 100 pips lower, sending it below parity, the other took place yesterday, after the ECB raised interest rates by 50 basis points, although it also hinted at a top, probably around 3.50%. Besides that, the president of the Swiss National Bank held a speech and he sounded pretty hawkish as shown in the comments below, which should turn this pair bearish if the 200 SMA gets broken.
SNBs Jordan Comments from Yesterday
- Price stability does not happen automatically
- We are seeing no wage spiral in Switzerland
- Swiss inflation is currently above the level of price stability and may stay raised for the time being
- Focus on the SNB is on limiting second-round effects of inflation
- Cannot rule out that SNB will have to raise rates further
- Central bank is ready to be active in currency markets when necessary
EUR/CHF moved lower yesterday, helped lower by the decline in EUR/USD as well. Looking at the hourly chart, the pair was consolidating just below the 100 hour MA in the European session (see blue line on the chart below). Seller leaned near the 100 hour MA and kept a lid on the pair.
EUR/CHF Live Chart
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