August 05, 2024 at 09:20AM
The pair traded to a low of 0.9210 earlier, before catching a bounce to 0.9310-20 levels currently. The jump in the past two hours is also perhaps why the euro is more resilient today, with EUR/USD up 0.5% to 1.0960 now. That is being helped by a rebound in EUR/CHF after meeting its lowest levels since late December and early January.
In the bigger picture, EUR/CHF remains caught in somewhat of a downtrend over the last few years.
The struggles of the euro area economy have not helped with that and last year, the franc was very much underpinned by the SNB getting in front of the game when hiking interest rates. After which, the central bank was more than happy to punch up the franc in order to combat imported inflation in trying to bring down price pressures.
That seemed to have settled for a bit though during the course of the year, all before the latest happenings since mid-July.
And that brings us to where we are now. A break below the lows at the 0.9257-64 region will see EUR/CHF tread unchartered waters on the way down. That frees up more scope for declines, should the negative sentiment in broader markets hold in the sessions ahead. But first, sellers have to get through the key hurdle above for now.
This article was written by Justin Low at www.forexlive.com.
