Best analysis

As Greece’s debt negotiations deteriorated this weekend, traders piled in to buy the “safe-haven” Swiss franc. In turn, the rapid appreciation in the value of the franc prompted the Swiss National Bank (SNB) to intervene in the FX market to stabilize the gains in its currency. In explaining the move, SNB Chairman Thomas Jordan stated, "We have always said that we are active in the foreign exchange market if necessary…[a] situation like we experienced over the weekend is a situation which warranted this need and we went in to stabilize the market,” though he declined to provide details on the intervention. He went on to note that the central bank is “observing developments very closely.”

In our view, the SNB’s determination to prevent excess appreciation in the franc may limit the long-term safe-haven appeal of the Swiss currency, though it could still see short-term bouts of strength if alarming Greek headlines continue to hit the wires.

Technical Outlook: EURCHF

From a technical perspective, the SNB’s actions have clearly stabilized EURCHF, which remains within its three-month, 300-pip range from 1.0250 to 1.0550. In the immediate term, previous support at the 50-day MA (currently at 1.0420) could now provide resistance and cap any rallies. The established downtrend in the MACD indicator bolsters the bearish case. That said, the SNB does not appear comfortable with the EURCHF below 1.0250, so any downside could be limited to that area for now.

eurchf

Source: FOREX.com

Technical Outlook: GBPCHF

By contrast, the technical outlook for GBPCHF is relatively constructive. In fact, the pair peeked out to a new 3-month high earlier today before reversing to trade back down below the 1.4700 level on the franc’s strength. Bulls will note that the daily MACD is still trending higher above its signal line and the “0” level, but the pair itself is trading below a short-term rising wedge pattern, which could lead to a near-term pullback toward the 50-day MA at 1.4460.

Fundamentally speaking, pound sterling may attract safe haven flows of its own if Greece moves further along the path toward default, so GBPCHF may resume its rally sooner rather than later; a close above 1.4800 in the next week or two would open the door for a potential move up toward 1.50 next.

gbpchf

Source: FOREX.com

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action. 

EUR/USD News

GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday

GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday

GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance. 

GBP/USD News

Gold price sits at all-time highs above $2,230, US PCE eyed

Gold price sits at all-time highs above $2,230, US PCE eyed

Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited. 

Gold News

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.

Read more

Key events in developed markets next week

Key events in developed markets next week

Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.

Read more

Majors

Cryptocurrencies

Signatures