EUR/CHF Signals & Technical Analysis
About the theEUR/CHF (EURO & Swiss franc)
Breaking Down ‘EUR/CHF’The euro (€; EUR) is the official currency of 19 of the 28 member states of the European Union. The euro is the second largest and second most traded currency in the foreign exchange market after the United States dollar. The euro is divided into 100 cents.Whereas, the Swiss franc, is a reserve currency. Therefore its value surges during times of uncertainty as investors seek safe-haven options. The exchange rate of Swiss Franc is also determined by economic factors such as interest rates, trade balance, and inflation, but the prices of gold, oil, and coal also tend to be important factors. This pair is known as a pair trend because there are usually great upward or downward trends. It is also often adapted to Swing Trading but because of its lack of buoyancy, it is less popular with scalpers. The EUR/CHF and the USD/SHF exchange rates are highly positively correlated.
What Determines the EUR/CHF Exchange Rate?Several factors can impact the EUR/CHF rate valuation, includingECB & SNB Monetary Policies The bank of the European Central Bank and Swiss National Bank control the supply of money in the market, to keep the economy on track. A dovish policy, which is also known as expansionary policy, from either of the central banks, weakens the related currency. In contrast, a hawkish monetary policy (contractionary policy) strengthens the currency.Economic Events: The movement in the Swiss Franc and Swiss National Banks determine the exchange rates. Top of the line economic events include GDP, Employment Change, Industrial Production, and Consumer Price Index. Better than forecast data increases the demand for the related currency and impacts the value of either the Euro or the Swiss Franc, causing fluctuations in the EUR/CHF exchange rate.
Major Economic Events:Gross Domestic Product – the Gross Domestic Product is the central measure of economic growth in the region.Employment Change – Both currencies are sensitive to changes in employment, as slacks in the labor market cause a drop in Inflation rates.Consumer Price Index – Since one of the goals of ECB and SNB is to maintain price stability, they keep an eye on inflation indicators such as the CPI. If the annual CPI deviates from the central bank’s target, the central banks could make use of their monetary policy tools to keep inflation in check.The balance of Trade – Australia and Switzerland have an extremely robust trade the sector, so currency traders and bank officials alike tend to watch changes in the countries’ export and import levels.Political announcements & natural disasters – Besides the scheduled economic events, political elections, new systems, wars, terror incidents, natural calamities, etc. can all cause severe variations within the EUR/CHF.
Currency CorrelationsCorrelation is merely a mutual relationship or connection between two or more things.Positive correlation – The positive relationship merely is when pairs move in tandem with each other.In the forex world, the CHF/SGD, CAD/CHF and USD/CHF currency pairs are positively correlated.Negative correlation – In contrast, a negative relationship is when forex pairs move in the opposite direction, For example, CHF/SGD, XAU/EUR, and CHF/JPYThe euro is one of the most important alternatives to the U.S. dollar among fiat currencies This is why there is often a positive link between the euro and gold: both assets are negatively correlated with the greenback. However, the relationship is far from being a perfect correlation, but also against the current monetary system based on fiat currencies.Economic Events: The movement in the European and Switzerland events determine the exchange rates. Top of the line economic events includes GDP Employment Change, Industrial Production, and Consumer Price Index. Better than forecast data increases the demand for related currency and impacts the value of either the Euro & Swiss franc, causing fluctuations in the EUR/CHF exchange rate.
Major Economic Events:Gross Domestic Product – the Gross domestic product is the central measure of economic growth in the region.Employment Change – The Euro is also sensitive to changes in employment, particularly in the Eurozone’s largest economies like Germany and France.Employment Change – The Swiss franc is sensitive to changes in employment, as slacks in the labor market cause a drop in Inflation rates.
EUR/CHF SpecificationsStandard lot Size: 100,000 Mini lot size: 10,000 Price minimum increment: 0.00001 Pip Value: $9.81
EUR/CHF - FAQs
The EUR/CHF currency pair is highly correlated and can be a good choice for traders looking for a reliable, low-volatility option. However, since neither economy is particularly volatile, the potential reward from EUR/CHF is relatively low compared to other pairs. As such, this may not be the best choice for active traders looking to generate high returns or leverage their investments.
The EUR/CHF rate is currently bearish, meaning that the value of the Swiss Franc is increasing relative to the value of the Euro. This has been attributed to a number of factors, including decreased demand for euros due in part to political uncertainty in the Eurozone and safer-haven demand for Swiss Francs from investors looking for a refuge from wider economic volatility.
At the time of writing this answer, the EUR/CHF exchange rate is 1.0841, meaning that 1 Euro (EUR) buys 1.0841 Swiss Francs (CHF). This means that the EUR is stronger than CHF at this moment, as it takes more CHF to buy 1 Euro than vice versa.
1. Interest rates: Changes in central bank rate decisions, quantitative easing policies and statements from policymakers influence changes in the interest rate of both countries and thus have an effect on the EUR/CHF exchange rate.
2. Economic growth: The relative performance of the Eurozone economy versus that of Switzerland impacts this currency pair, as do announcements of economic data such as GDP, inflation, unemployment and retail sales figures.
3. Political uncertainty: Events such as elections or policy developments also have an impact on both currencies, so investors may act according to their expectations concerning future events which could be positive or negative for either nation's currency value.
4. Risk appetite: This currency pair is considered a safe-haven asset typically consisting of long positions (buying the EUR/CHF) during risk-off periods when traders are seeking safety from other riskier trades due to geopolitical concerns or significant market volatility; conversely shorting this pair might be attractive during times when global markets appear stable and risk is relatively low.
5. Liquidity: As with any currency pair, liquidity matters regarding its overall performance due to its ability to absorb larger amounts of orders without significantly affecting prices; more liquid pairs tend to trade at higher volume and narrower spreads (the cost of trading), making it easier for everyday traders to enter and exit trades quickly at competitive prices.