More Upside in USD/CHF and EUR/CHF as SNB Confirms Dovish Bias

The EUR and USD to CHF rate has been on a steady bullish trend since reversing at the start of 2024, and more gains are expected in both, EUR/CHF and USD/CHF, especially now that the Swiss National Bank has turned quite dovish, delivering a surprise rate cut in last week’s meeting.

EUR/CHF Chard Weekly – The 100 SMA Has Been Broken

On the EUR/CHF weekly chart, we can see that this pair has been on a declining trend since 2021, with moving averages acting as resistance at the top. But we saw a reversal at the beginning of 2024 which has pushed the price above the 100 weekly MA (green) now, confirming the bullish momentum. Comments from the SNB president Thomas and his successor-to-be reinforced the bearish bias for the CHF and the bullish bias for EUR/CHF and USD/CHF .

Swiss National Bank’s Chairman Thomas Jordan Remarks

• Lower inflation pressure: Jordan mentioned that the reduction in inflation pressure allowed the SNB to lower interest rates. This suggests that the central bank’s decision to adjust interest rates was influenced by the inflationary environment.
• Monitoring exchange rates: Jordan emphasized that the SNB closely monitors exchange rates and intervenes in the foreign exchange (Forex) market when necessary. This intervention could be aimed at stabilizing the Swiss Franc or managing its exchange rate against other currencies.
• No fixed exchange rate goal: Jordan clarified that the SNB does not have a predetermined goal for the Swiss Franc’s exchange rate. This indicates that the central bank’s exchange rate policy may be more flexible and adaptive to market conditions.
• Reduction in balance sheet size: Jordan highlighted that the SNB has reduced the size of its balance sheet, which has helped the central bank address inflationary pressures. This reduction in the balance sheet size may have been part of the SNB’s broader monetary policy strategy to manage inflation and support economic stability.
• Soon to be President added that the Bank has no target for the franc (CHF) exchange rate

So overall, EUR/CHF appears to be exhibiting strong bullish momentum as SNB officials turn dovish first, particularly with the price trading above the 100 weekly SMA and reaching highs not seen since June 2023. However, maintaining levels above key resistance points, such as 0.9750 where the 100 SMA stands now, will be crucial for further confirmation of bullish sentiment and potential upside continuation, perhaps toward parity.

EUR/CHF Live Chart