EUR/CHF flattens as US Dollar strength and Franc's safe-haven demand weigh on Euro

The Euro (EUR) flattens against the Swiss Franc (CHF) on Thursday, giving up early gains as the EUR/CHF cross edges lower during the American trading hours. After a strong start to the day, the Euro failed to sustain momentum, coming under pressure from broad-based US Dollar strength and stronger-than-expected US weekly labor data, which reinforced the Greenback’s appeal and weighed on the shared currency.

At the time of writing, the EUR/CHF is trading around 0.9314, retreating from an intraday high of 0.9328. Despite the pullback, the cross remains marginally higher, up 0.06% on the day.

The Swiss Franc continues to display broad-based strength this year, with gains not only against the Euro but more strikingly against the US Dollar, where it has appreciated nearly 13% year-to-date. This surge reflects a combination of persistent safe-haven demand amid global trade tensions and deflationary pressures at home.

The difference in monetary policy between the European Central Bank (ECB) and the Swiss National Bank (SNB) is also playing a big role. The ECB cut rates in June and is likely to pause in July as it deals with trade and geopolitical risks. In contrast, the SNB has been more aggressive, cutting its rate to zero and quietly introducing a negative rate on extra bank reserves. SNB officials have also stated that they’re open to further cuts if necessary. As a result, the Franc remains in demand, supported by both its safe-haven status and the SNB’s ultra-loose policy, putting pressure on the EUR/CHF pair.

From a technical perspective, EUR/CHF remains under pressure, trading near the lower edge of its multi-week consolidation range between 0.9300 and 0.9400. After multiple failed attempts to break higher in June, the pair has drifted lower in July, with the 21-day Exponential Moving Average currently at 0.9352 acting as an immediate dynamic resistance. The recent price action suggests bearish momentum is building, with sellers eyeing a potential breakdown below the key support at 0.9300.

Momentum indicators reinforce the bearish bias. The Relative Strength Index (RSI) is trending downward and currently sits at 42.10, below the neutral 50 mark, indicating weakening bullish momentum. Meanwhile, the Average Directional Index (ADX) has risen to 21.18, hinting at a developing trend after a prolonged period of sideways movement. A sustained close below 0.9300 would confirm a downside breakout and expose the pair to further losses, possibly toward the 0.9250 area. On the upside, recovery above 0.9350 is needed to shift the near-term outlook back to neutral.