The euro continues to grind higher against the lowly Swiss franc, as we are looking at a carry trade pair, with the Swiss National Bank sticking to the 0% interest rate policy, despite recently improving Swiss numbers.
EUR/CHF
The euro has rallied a bit during the early part of the trading session on Friday as we continue to see interest rate differentials play out in favor of the euro. This is a longer-term play that a lot of traders like to use to take advantage of risk appetite and growth opportunities.
Top Regulated Brokers
Keep in mind that the Swiss National Bank is hanging on to a 0% interest rate situation, and with this, markets continue to favor shorting the Swiss franc in general. The 0.94 level underneath is significant support, as we have previously seen resistance.
If we can break above there, then 0.9640 could be a target
Ultimately, this is a market that looks as if it is trying to break out from here, as we have cleared the 0.94 level. With this, I look at the market as one that I am buying on dips.
The interest rate differential alone makes it interesting, and of course, the Europeans are starting to sound more and more likely to be in a situation where they are possibly looking to hike later. We will just have to wait and see whether or not the ECB could continue to see hawkish behavior and is willing to raise rates overall.
Meanwhile, the Swiss, despite the fact that they have higher inflation and GDP numbers this last go-around, still maintain that 0% interest rate differential. Of course, you have the trend in your favor. Looking for value remains the case as far as I can see. I have no interest whatsoever in shorting this pair, as it is far too strong.
Ready to trade our daily forex forecast? Here are the best online trading platforms in Switzerland to choose from.