EUR/CHF: Still room to rise toward the 1.0500 area .

The EUR/CHF pair has climbed back above parity over the past week after bouncing off support for the 200-day moving average at around 0.9930, explained analysts at MUFG Bank. They see that price action supports their view that there is still room for the cross to rise back towards the levels that were in place during the second quarter of last year at closer to the 1.0500-level.

Key quotes:

“Euro-zone economies are proving more resilient over the winter period, and leading indicators such as the PMI surveys released over the past week have further dampened recession fears. The warmer winter weather has also meant that natural gas inventories are holding up better than expected in Europe putting additional downward pressure on prices. The favourable developments provide more support for the EUR at the start of this year. Given the CHF’s role as a regional safe haven currency, the CHF should weaken as downside risks in the euro-zone continue to ease.”

“We also believe there is room for EUR/CHF to play catch up with the move higher in EUR/USD since late last year. The SNB has been intervening to support the CHF recently. With inflation pressure globally and in Switzerland now easing, the SNB could become more tolerant of allowing the CHF to weaken somewhat.”

EUR/USD retreats to 1.0850 area as US Dollar rebounds

EUR/USD has extended its slide toward 1.0850 in the American session. Profit-taking ahead of the weekend and the negative shift witnessed in risk sentiment seems to be helping the US Dollar gather strength against its rivals, weighing on the pair.


GBP/USD trades on the back foot below 1.2400

GBP/USD is having a difficult time gathering recovery momentum and trading in negative territory below 1.2400 on Friday. Although the data from the US showed that PCE inflation continued to soften in December, the US Dollar holds its ground heading into the weekend.


Gold struggles to hold above $1,930

Gold price has lost its traction and declined below $1,930 during the American trading hours. The benchmark 10-year US Treasury bond yield clings to modest daily gains above 3.5% ahead of the weekend, not allowing XAU/USD to gain traction.

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