Recent days have brought a huge appreciation of the CHF, and the scale of this move is clearly illustrated on the EURCHF chart. Russia's aggression towards Ukraine led to a very strong depreciation of the euro against the franc, and today the psychological support at 1.0000 was tested As Reuters reported on Monday, the SNB (Swiss central bank) is ready to intervene (if necessary) on the forex market, which would stop the strengthening of the franc. The SNB also added that the valuation of the franc is still high. As one can see, CHF strengthened after the announcement of a potential intervention. During Monday's session the Swiss franc is losing more than 1% against the US dollar and about 0.5% to the Euro.
From a technical point of view, the EURCHF pair bounced off the 1.0000 parity, a level not seen since 2015. This level should be considered as major support, and recent sell-off may intensify should break lower occur. On the other hand, it should be noted that in the event of further strengthening of the CHF, the risk of SNB intervention, and consequently a dynamic upward correction, will increase.
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EURCHF interval W1. Source: xStation
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