The Euro continues to see upward momentum against the Swiss franc, as we are looking likely to see interest rates favor the buyers.
EUR/CHF
The Euro broke to the upside during the trading session on Thursday, slicing through the 0.9350 level, and it now looks as if we are trying to break out even further. The interest rate differential, of course, favors the Euro, and this is how this pair does tend to move in times where things are okay. It looks like more risk appetite has entered the market in general, not just this pair, but overall.
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If that's going to be the case, then it's likely that market participants will continue to look at this as a market that is trying to sort things out. With a significant amount of momentum coming into the market during the day on Thursday, we could see an attempt to follow through. This is a pair with the interest rate differential in your favor that also pays you at the end of every day to hold it, and that is something that I think we need to pay close attention to.
Golden Cross Technicals Support Further Upside
Ultimately, this is a market that will be watching the 0.94 level, which was a swing high, followed by the 0.9450 level. This is not a fast-moving pair most of the time, but we've recently had the so-called Golden Cross where the 50-day EMA breaks above the 200-day EMA and, of course, have also had a significant amount of momentum to the upside.
If that's going to remain the case, then I think you have to look at this as a market that buying on the dips makes the most sense. I have no interest in shorting this EUR/CHF pair because, quite frankly, I don't want to pay to do it. If I want to short the Euro, I'll find other currencies to do it against, not something that I have to pay to have the privilege of holding.
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