FX.co ★ skullcrusher | EUR/CHF

Fundamental Overview: The EUR/CHF currency pair is heavily influenced by macroeconomic stability and monetary policy differences between the Eurozone and Switzerland. The Swiss franc, which is considered a safe haven, has gained significantly amid global uncertainty. The European Central Bank (ECB) continues its prudent monetary policy due to persistent inflation concerns and slowing economic growth in some EU member states. At the same time, the Swiss National Bank (SNB) is taking a more interventionist stance, prioritizing price stability and maintaining Swiss export competitiveness. Uncertainty surrounding European economic data towards mid-2025, ongoing geopolitical uncertainty, and Switzerland’s solid fundamentals are weighing on the EUR/CHF. Due to these uncertainties, investors are generally preferring the Swiss franc, and the EUR/CHF currency pair is in a long-term downtrend. Trend Structure and Price Action: The weekly chart of the EUR/CHF currency pair shows a clear long-term downtrend since the April 2018 high of 1.205. Since then, the pair has been in a steady downtrend, making lower highs and lower lows. This downtrend is reinforced by a multi-year downtrend. The most recent low was recorded in late December 2023 at 0.9690, which is almost exactly the level of the downtrend line that has been acting as a dynamic resistance line since May 2021. The price followed this line, but failed to gain enough upside momentum to break it. The EUR/CHF pair has been trading sideways just above 0.9330, forming a narrow symmetrical triangle pattern since March 2024. The price is currently trading at 0.9367, which suggests that the market is approaching the breakout point of this triangle pattern, which could determine the direction of the pattern in the coming weeks. Key Price Levels and Fibonacci Retracements: Fibonacci retracements with pivot points at the high of 1.2005 (April 2018) and the low of 0.9250 (October 2022) provide important information about resistance levels. The pair failed to break the 23.6% level of 0.9790, confirming the dominance of the downtrend and the weakness of the possibility of a correction. Resistance Levels: 0.9690-0.9710: Current high and upper limit of the triangle pattern. 0.9790 (Fibonacci 23.6%): Previous resistance level that has served as the upper limit since May 2023. 1.0085 (Fibonacci 38.2%): Intermediate resistance level for an upside breakout and potential reversal zone. 1.0380 (Fibonacci 61.8%): Golden Ratio. Low probability unless trend reversal confirmed. Support: 0.9330: Short-term horizontal support and baseline of symmetrical triangle pattern. 0.9250: Major support since October 2022 low. 0.9100-0.9040: Long-term support since 2015 low. Failure to break above 0.9330 could lead to a resurgence of risk towards 0.9250 and then 0.9100, which could lead to a continuation of the overall downtrend. Bollinger Bands and Moving Averages: The Bollinger Bands are significantly narrowed, suggesting low volatility and upside potential. Price is trading within the middle band (20-week moving average), but there is little room to move up to the upper band. Therefore, we maintain a cautious approach and maintain a neutral view. The short-term exponential moving averages (9-day and 21-day moving averages) are stable and compressed just below the price, indicating a balance between buyers and sellers. However, if the price fails to break above the upper line of the triangle, the downtrend is likely to continue. Candlestick Movement and Reanalysis: Last week's candlestick was a narrow doji pattern, indicating indecisive movement and low volatility. This pattern formed just inside the apex of the symmetrical triangle, suggesting a sideways movement. This doji pattern formation followed last week's bearish-bullish candlestick. It attempted to induce price to rise, but failed to break above the resistance level of 0.9400. The formation of this pattern suggests increasing uncertainty among investors. Failure to continue the uptrend of the previous candlestick suggests a possible downside correction. Unless next week's candlestick breaks this line with strong volume and a strong trading zone, the price is likely to continue to fluctuate within the current pattern. RSI and MACD Momentum Analysis: The Relative Strength Index (RSI) (14) has been trading below its 50-day moving average (MMA) at approximately 47.79 for several months. This indicates weakening upward momentum and a continuation of the downtrend. The RSI formed a slight bullish divergence at its October 2022 low, but a sustained break above the 50-day MMA is required to confirm this trend. The MACD (12, 26, 9) remains in a downtrend, with the histogram below the zero line and the MACD line just below the signal line. Downward momentum has weakened, but no bullish crossover has occurred, and the indicators are aligned within a broader downtrend. Conclusion and Outlook: EUR/CHF is in a long-term downtrend and has been trading in a symmetrical triangle pattern for several months. The pair is trading between 0.9330 and 0.9400, awaiting a clear breakout. A successful breakout of the downtrend line at 0.9490 could lead to a medium-term correction towards 0.9790 and 1.0085. Conversely, a break below 0.9330 could consolidate the downtrend and establish strong support at 0.9250 and 0.9100. Indicators and price structure suggest that the market is moving sideways, but the overall downtrend remains intact. While awaiting a clear breakout, investors should exercise caution and pay close attention to trading volume, momentum, and candlestick movements.