The euro has fallen rather significantly against the Swiss franc during trading on Friday as it looks like a lot of risk appetite is being destroyed again.
And there are concerns out there when it comes to the idea that the situation in Europe may get decidedly dark if energy from the Middle East isn’t going to be available.
With that being the case, I like the EUR/CHF pair to the downside in the short term, but longer term, I am a buyer of this pair. The interest rate differential alone is a major driver, and then again, you have to keep in mind that the Swiss National Bank is very open in its disdain for a strengthening Swiss franc and will get involved if things get a little too aggressive to the downside in this pair.
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The SNB Will Be Watching this Pair
After all, this is the primary pair that they watch for measuring whether or not the Swiss franc is getting too expensive. After all, they send 85% or so of their exports into the European Union.
The 0.91 level I believe is going to be support. On the other hand, if we can turn it around and rally from here, the 50-day EMA at 0.9165 could offer a bit of resistance.
Again, you get paid to hang on to this pair to the upside, so if you are a longer-term swing trader, these types of dips are nothing but a buying opportunity. I don't have any interest in shorting whatsoever. I just don't want to pay the interest rate differential and, of course, do not want to risk any Swiss National Bank intervention.
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