EUR & CHF - The bad and the ugly
Updated
What better way to start the new year than with a EURCHF long?
I am open to suggestions.
EUR view:
➡️ Inflation in the eurozone will rise slightly in early 2023 and climb towards the 3% mark🟢
➡️ In addition, however, it will fall more sharply in the following months than the ECB currently expects, forcing the ECB to cut interest rates earlier than planned🟢
➡️ My expectation here is March (at the earliest) or April 2024🟢
The CHF view explains why I still see the EURCHF strengthening in the short term:
➡️ The SNB will soon follow the ECB and also very likely make a 1st rate cut in the 1st half of 2024🟢
➡️ Although Swiss inflation will also briefly move back towards the 2% mark at the beginning of 2024, driven by rent increases and higher electricity prices, it will then also stabilise below the 2% mark again🟢
➡️ As soon as it returns from its skiing holiday in the Swiss Alps, the SNB will not be happy about the excessively high level of the CHF and will either tolerate a (slightly) weaker franc or even aim for it itself🟢
Conclusion:
The EURCHF therefore has room for a 200 - 300 pip upward move and will very likely tackle this in the new year, giving me a good start to the new year!:)
I am open to suggestions.
EUR view:
➡️ Inflation in the eurozone will rise slightly in early 2023 and climb towards the 3% mark🟢
➡️ In addition, however, it will fall more sharply in the following months than the ECB currently expects, forcing the ECB to cut interest rates earlier than planned🟢
➡️ My expectation here is March (at the earliest) or April 2024🟢
The CHF view explains why I still see the EURCHF strengthening in the short term:
➡️ The SNB will soon follow the ECB and also very likely make a 1st rate cut in the 1st half of 2024🟢
➡️ Although Swiss inflation will also briefly move back towards the 2% mark at the beginning of 2024, driven by rent increases and higher electricity prices, it will then also stabilise below the 2% mark again🟢
➡️ As soon as it returns from its skiing holiday in the Swiss Alps, the SNB will not be happy about the excessively high level of the CHF and will either tolerate a (slightly) weaker franc or even aim for it itself🟢
Conclusion:
The EURCHF therefore has room for a 200 - 300 pip upward move and will very likely tackle this in the new year, giving me a good start to the new year!:)
Note
📊🇨🇭This week we got the Swiss CPI which could bring some volatility into the market📊🇨🇭Inflation data out of Switzerland over the next two months:
-> It will rise slightly, as the higher electricity prices are now having an bigger effect and also rental prices, which are adjusted once a year in Switzerland, will also contribute to an increase.
Note
📊🇪🇺PPI Data out of the Eurozone will come weaker today than the consensus expects it.-> Not great for the EUR but it should not do too much damage to my EURCHF Trade✅️
Note
📊🇪🇺As forecasted the PPI Data out of the Eurozone was weaker than the consensus expected it.-> easy :)
-> Didn't do much damage to my EURCHF Trade✅️
🟢The trade is starting to work with a slight +50 Pips in Profit🟢
-> Still a long way to go.
Note
🟢 The trade should finally overcome the mini resistance at 0.934 today 🟢 -> the next target would be the 0.94200 mark (marked in the chart), although I see a breather here and don't think it will break it on the 1st attempt.
(Not in the short term at least, in the long term it is likely to fall of course)
Note
🟢EURCHF continues to be a fun trade and is already in profit with over 140 pips🟢I have to quote the famous slogan from the famous fastfood chain here: I love it!✅️
It is currently making a lot of headway towards the 0.94200 mark.
If it breaks through it at full steam on the 1st attempt, there would be practically nothing standing in the way of the TP at 0.955🟢
A profit of almost 300 pips in less than 1 month would be more tasty than the BigMac for me!✅️
🇨🇭📊 (Only the Swiss CPI data at the beginning of February could act as a spoilsport here...)
Note
🏛🇪🇺 The EURCHF long made a stronger correction after the ECB (unsurprisingly) revealed its dovish face.-> But since this week its right back aiming strongly towards the 0.955 target🟢
🇨🇭📊next week's inflation data from Switzerland could provide a further boost to the upside✅️
⚠️📊🔮As predicted 2 months ago, Swiss inflation will rise towards 2% or possibly even slightly higher this time🔮📊⚠️
Note
✅️Take Profit reached: +260 pips ✅️🟢A very nice and simple trade🟢
-> Trades like this are the most fun and taste better than any Big Tasty!
-> I'm lovin it✅️
Here are the bare numbers:
🟢Profit: 260 Pips✅️
🟢Duration of the trade: 8 weeks ✅️
🟢Time in drawdown: 0✅️
🟢Pips in drawdown: 0✅️
🟢Check out my USDCHF Longterm trade (also in profit) for another CHF Trade!🟢
Note
🏛🇨🇭 And the SNB was actually the first of the G8 central banks to cut interest rates back in March-> the CHF got a good beating💥💥💥 (as expected)
-> i'm waiting for pullbacks in the EURCHF to buy it again✅️
-> 🔮my prophecy from December last year came true🔮
! 🔮But that's not all folks🔮 !
-> 🏛🇨🇭Ich expect the SNB to cut interest rates again in June🔮
-> the CHF train will continue its downwards journey✅️
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.