eurchf

DAILY: Left Chart. EURCHF is overall bearish and now approaching a resistance so we will be looking for sell setups on lower timeframes. H1: Right Chart EURCHF is forming a channel in red but the lower trendline is not valid yet, so we are waiting for a new swing low to form around it to consider it our trigger swing. Read next: Altcoins' Rally: Solana (SOL) Soars Even More, DOT and SHIBA INU Do The Same! | FXMAG.COM Trigger => Waiting for that swing low to form and then sell after a momentum candle close below it (gray zone) Meanwhile, until the sell is activated, EURCHF can still trade higher. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun Good luck! All Strategies Are Good; If Managed Properly! ~Rich

Summary: ECB interest rate decision due to occur later this week. Confidence vote being held for Boris Johnsson later on Monday. Investor confidence could be returning to the markets. On Tuesday the Reserve Bank of Australian (RBA) is due to announce its decision regarding tightening of monetary policy. Read next: Altcoins: Decentraland (MANA), What Is It? A Deeper Look Into The Decentraland Platform  EUR strong entering the week On Monday market sentiment for this currency pair turned bearish. The Euro opened stronger on Monday as the market awaits the European Central Banks (ECB) interest rate decision, which is due to occur later this week. If the European Central Bank shows any signs of dovish intentions, the effects could be heavy on the Euro's downside, however, if a hawkish attitude is shown (which seems to be more likely), the upside effect on the euro may be minimal as the expected hike is already priced into the market. U.S CPI data is expected to close off this week, if there is another undershoot regarding the CPI data, it will just confirm that inflation has reached its peak and add to dovish pressure. EUR/USD Price Chart Both Euro and Pound sterling entered the week strong The market is reflecting mixed signals for this currency pair. As the market awaits the European Central Bank's (ECB) announcement regarding the decision for interest rates in July and September, the Euro entered the week strong. In addition, the pound sterling also entered the week strong despite a confidence vote being held this evening to determine Prime Minister Boris Johnssons future as leader. The pound sterling holding strength, shows its resilience to political tensions. EUR/GBP Price Chart EUR/CHF bullish The market is reflecting bullish signals for this currency pair. Amidst the expected announcements from the European Central Bank this week, the Euro has entered the week strong, even against the safe-haven Swiss Franc. During times of economic stress, investors normally turn to safe-haven assets, however investor confidence seems to be returning to the markets. EUR/CHF Price Chart RBA due to make an announcement The Australian Dollar entered its third week of gains this week in the wake of China’s easing of Covid-19 lockdowns and stronger than expected GDP data. However, on Tuesday the Reserve Bank of Australian (RBA) is due to announce its decision regarding tightening of monetary policy. The price of the GBP/AUD currency pair is sensitive to the price changes of the GBP/USD currency pair. GBP/AUD Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com

Against the backdrop of elevated price pressures, economists at CIBC Capital Markets expect the Swiss National Bank (SNB) to be increasingly prepared to tolerate a stronger franc. Additional policy tightening “In the context of elevated CPI, we can expect the SNB to remain wary of elevated price pressures feeding through into wage demands; this comes as the unemployment rate is at a 20-year low of 2.1%.” “A central bank keen to bear down on wage growth and an overheated real estate market could prove to be more activist than the ECB, supporting a stronger CHF into 2023.” “EUR/CHF: Q4 2022: 0.94 | Q1 2023: 0.97”

EUR/CHF has traded fairly volatile, most recently moving back up to 0.97. Nonetheless, economists at Danske Bank expect the pair to edge lower toward 0.93 over the coming months. Swiss National Bank to hike by 75 basis points in December “We expect the SNB to hike by 75 bps in December to curtail underlying inflation pressures bringing the policy rate to 1.25%. With the SNB broadly following the ECB, we see relative rates as an inferior driver for the cross.” “We continue to forecast the cross to move lower on the back of fundamentals and a tighter global investment environment.” “We continue to forecast EUR/CHF at 0.93 in 12M.”

Yesterday was the third time this year that the USD/CHF reversed sharply from levels just above 1.00. The Swiss National Bank (SNB) could be behind the move as it wants to avoid a soft franc, economists at ING report. What to make of USD/CHF at parity? “Could the Swiss National Bank (SNB) be at work here? Recall that the dollar is the second-largest weight in the Swiss franc trade-weighted basket and a higher USD/CHF will naturally weaken the nominal trade-weighted Swiss franc – something the SNB wants to avoid as it battles inflation. In fact, SNB president Thomas Jordan is turning into one of the most ardent hawks in the central bank community.” “We have quite a forthright view on EUR/CHF at the moment that the SNB wants to guide it lower by 5% plus per year. The higher USD/CHF is making the trade-weighted Swiss franc even softer and if we are right, the SNB should be even more inclined to drive EUR/CHF down to 0.95 and away from the near 0.98 levels at which spot EUR/CHF trades today.”

EUR/CHF is trading close to parity again. Economists at Commerzbank believe that the pair could extend its advance. Swiss National Bank can still sit back for now “During the last monetary policy evaluation, the head of the SNB Thomas Jordan had pointed out that the franc would contribute to dampening inflation pressure: at the time CHF had appreciated by 7% since June.” “The franc has not completely retraced its gains which might explain why the SNB can still sit back for now. However, it also means that EUR/CHF still has some upside scope until the SNB might begin to feel unhappy about the developments.”

On the Swiss franc front, investors keep an eye on Consumer Price Index (CPI) data. As the SNB is set to continue fighting excessive inflation, the EUR/CHF is unlikely to trade above parity, economists at Commerzbank report. Swiss inflation stands at 3% “Swiss inflation stands at 3%, as inflation data for November due today is likely to confirm. That means that inflation exceeds the Swiss National Bank’s target. The Vice-President of the SNB Martin Schlegel has made clear that the SNB will not lean back and do nothing, but will instead continue to take action against excessive inflation levels.” “Even though the SNB has quietly accepted the Franc’s depreciation of just over 3.5% against the Euro since the end of September, the FX market can never be entirely sure when the SNB’s patience will run out while inflation remains well above its target. Hence, we assume that it will still take some time before EUR/CHF will seriously tackle parity.”  

The Swiss Franc has been one of the strongest currencies over the last one and a half years, but that seems to be over. A firm bottom is in place at 0.9403 and a rally back to the 2013 high at 1.2650 is in progress. Short-term we would like to see a break above minor resistance at 0.9885, which will open the way for a rally towards the trendline resistance near 1.0531. This resistance line is likely to reject the first attempt to break above it, but the second attempt should prove successful and will call for more upside towards the long-term target near 1.2650.   Relevance up to 06:00 2022-12-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303969

The Swiss National Bank (SNB) meets on 15 December and is expected to decide on a third rate hike, this time probably by 50bp, in the context of a stabilisation of inflation at 3%. A further rate increase could then take place in March 2023, after which rates are likely to remain unchanged. We forecast further nominal CHF appreciation in the first half of 2023 New tightening to come After years of fighting deflation with a very accommodating monetary policy, including interventions in the foreign exchange market to weaken the Swiss franc and the lowest policy interest rate in the world, the SNB began a normalisation of monetary policy in June 2022 to fight inflation. After a 50bp increase in June and a 75bp increase in September, the Swiss policy rate returned to positive territory at 0.5%. In November, inflation in Switzerland stabilised at 3%, down from the August peak of 3.5%. Inflation is therefore still above the SNB's target of between 0-2%, but well below that of neighbouring countries, thanks to a more favourable energy mix, a lower share of energy in consumption and the strength of the Swiss franc, which limits imported inflation. At its December meeting, the SNB is expected to acknowledge that Swiss inflation has probably passed its peak and that the deceleration observed since the summer is a good thing. It will provide new inflation forecasts, with a likely downward revision for 2022 (it was expecting 3.0% on average for the year at its September meeting, but 2.8% now seems more likely). At the same time, it will probably also warn against celebrating victory too soon and insist that inflation is still well above its target and that second-round risks remain significant. As a result, we expect the SNB to raise its policy rate by 50bp at the December meeting, leading to a total rate increase over the year 2022 of 175bp in Switzerland, against probably 250bp in the eurozone and 425bp in the US over the same period. Going forward, we expect price growth to decelerate gradually but slowly, remaining above target for the first half of the year, before falling back below 2% by the end of 2023. We expect the SNB to make a final 50bp hike at its March 2023 meeting, bringing the rate to 1.5% and leaving it there for an extended period. FX: Does the SNB still want a firmer Swiss franc? EUR/CHF goes into the December SNB meeting not far from second-half highs at 0.9900/9950. Recent trading ranges have been relatively subdued after the volatility seen throughout the summer. Interestingly the FX options market seems to be taking a keen interest in the upcoming meeting, where traded volatility for the 15 December event risk has picked up. The FX options market now prices 0.75% moves for EUR/CHF and USD/CHF on the day itself. While the SNB will say that it does not target the exchange rate, earlier this year it had been happy to announce it had backed nominal appreciation in the Swiss franc. And a core piece of communication during this second half has been that the SNB is prepared to intervene on both sides of the market. Historically it had only been happy to sell the Swiss franc as it battled deflation. Its stance on intervention is now more equivocal. As far as we can understand, the SNB’s FX policy now is to keep the real exchange rate stable as it wrestles with above-target inflation. As our chart shows, the real trade-weighted Swiss franc has been relatively stable this year (down 1.5% year-to-date). Given Switzerland’s far lower inflation than trading partners, the real CHF has been kept stable by allowing nominal CHF appreciation (+3.6% YTD). SNB delivers real CHF stability and nominal CHF appreciation Trade-weighted indices Jan 2010 = 100 Source: SNB, ING   Assuming the SNB stays hawkish and wants to keep the real CHF stable, further nominal CHF appreciation is our call in the first half of 2023. The weaker dollar (a 12% weight in the CHF basket) has contributed to some of the nominal CHF appreciation recently. If we are right with our call for a stronger dollar into the first quarter of 2023, and the SNB still wanting to keep the real CHF stable, then a lower EUR/CHF will be the requirement for early next year. That – and the Swiss franc’s defensive properties in a difficult 2023 – are factors behind our forecast for EUR/CHF heading back to the 0.95 area next spring. Read this article on THINK TagsSwitzerland Swiss National Bank SNB CHF Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

  The Swiss National Bank (SNB) raised its key rate by 50bp as expected, bringing the total monetary tightening to 175bp. The upward revision of medium-term inflation forecasts signals a further rate hike in March A 50bp hike As widely expected, the SNB decided to raise its key rate by 50bp to 1% – following the 75bp increase in September and the 50bp increase in June – to combat the spread of inflationary pressures. The total monetary tightening in Switzerland will therefore have been 175bp in 2022, compared with probably 250bp in the eurozone and 425bp in the United States over the same period. The SNB also indicated that it is prepared to continue to be active in the foreign exchange market. In recent months, the SNB has sold foreign currencies, which has helped to strengthen the appreciation of the Swiss franc and limit imported inflation.  Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Inflation expectations are above the medium-term target After years of fighting deflation with a very accommodating monetary policy, the SNB remains very uncomfortable with the current level of inflation, despite the stabilisation at 3%, down from the peak of 3.5% reached in August. It believes that "inflation remains well above the range that the SNB equates with price stability", which is between 0% and 2%, and that "while developments are pleasing, it is too early to let our guard down". Thanks to a more favourable energy mix, a lower share of energy in consumption, and above all the appreciation of the Swiss franc, which limits imported inflation, inflation in Switzerland is nevertheless much lower than in neighbouring countries. That said, the SNB considers that the risk of second-round effects is still present, which is why "it cannot be ruled out that further rate hikes will be necessary to ensure price stability in the medium term". The SNB's inflation forecast shows inflation at 2.1% at the end of its forecast horizon, the third quarter of 2025. It believes that "increased inflationary pressure from abroad and the spread of price increases to the various categories of goods and services in the consumer price index will push this forecast higher in the medium term". The SNB now expects inflation to average 2.9% in 2022, 2.4% in 2023 and 1.8% in 2024. These above-target inflation forecasts for the end of the forecast horizon signal that the SNB is not done with monetary tightening. We believe that a further 50bp rate hike could take place at the next meeting in March 2023, taking the rate to 1.5%. Rates will then remain stable for an extended period. Indeed, we expect price growth to decelerate gradually but slowly over the year. This will make it more comfortable for the SNB to intervene in the foreign exchange market afterwards, without changing the interest rate further. FX: SNB confirms it has been selling FX reserves recently In today’s communication, SNB President Thomas Jordan confirmed that the SNB had been intervening in FX markets to sell FX over recent months. This has got nothing to do with the SNB wanting to downsize its FX reserves for financial stability reasons, but everything to do with monetary policy. Here Jordan confirmed that a stronger Swiss franc has helped ensure that less inflation has been imported from abroad. This is all in keeping with this year’s policy of wanting to keep the real Swiss franc stable. To achieve that – and given that Swiss inflation is substantially lower than that overseas – the SNB requires nominal Swiss franc appreciation. The SNB confirmed the nominal franc has appreciated 4% this year. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM On the assumption that inflation differentials between Switzerland and its trading partners do not immediately narrow, we assume that the SNB will want further nominal appreciation in 2023. The big question is through which channels this occurs. The recent sharp fall in USD/CHF has taken the pressure off the EUR/CHF axis to make the adjustment. But if we are right with our call for the dollar to strengthen into the first quarter of 2023, then EUR/CHF will have to come lower – helped in part by SNB intervention. Our call is that EUR/CHF continues to struggle to hold any gains over 0.99 and heads back to the 0.95 area into next spring. Read this article on THINK TagsSwitzerland SNB Inflation CHF Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Analysts at JP Morgan offer a negative outlook for EUR/CHF for the year 2023, with a target of 0.95 in Q1 2023 and 0.92 by the end of 2023. Key quotes “CHF's anti-cyclical properties and the SNB's bullish policy regime shift for the currency point to further downside for EUR/CHF into 2023.” “The CHF remains one of the best proxies of global growth, serving as a reliable hedge against lingering downside risks to the cycle next year.” “Real rate differentials and Switzerland's sustained current account surplus remain bullish CHF tailwinds, particularly vs. EUR.” “Deleveraging flows should also be CHF-supportive.”

Economists at Commerzbank see upside potential in EUR/CHF, but only moderately. CHF is likely to be less in demand as a safe haven “With the ECB likely to raise its key rate more strongly by the middle of the year, we see depreciation pressure on the Swiss Franc against the EUR in the coming months.” “Moreover, due to easing concerns about an energy crisis and recession in Europe, the CHF is likely to be less in demand as a safe haven.” “The depreciation potential of the Franc is likely to remain limited in view of the SNB and possible interventions against an excessively weak franc though, especially if the inflation picture should cloud over again contrary to our forecasts.” Source: Commerzbank Research