EURCHF TRADE LIKE WHALETHE SNB( Swiss national bank ) under its three member governing boards
1; Martin Schlegel ,Chairman of the governing board of Zurich
2; Antoine martin, vice Chairman of the governing board ,berne
3; Petra Tschudin ,member of the governing board of Zurich.
The correlation between the euro and the Swiss franc currency pairs is too strong to be ignored by traders on the forex market. The correlation between the two currency pairs EUR/USD (euro/U.S. dollar) and USD/CHF (U.S. dollar/Swiss franc) is negative 98.4% as of November 2024.
This represents an inverse relationship indicating that the USD/CHF (U.S. dollar/Swiss franc) mostly sells off when the EUR/USD (euro/U.S. dollar) rallies and vice versa.
The EUR/CHF (euro/Swiss franc) can be replicated by a long position in EUR/USD (euro/U.S. dollar) and a long position in USD/CHF (U.S. dollar/Swiss franc).
The strong EUR/USD and USD/CHF relationship is stronger than that of other currency pairs.
This strength is due to the close ties between the eurozone and Switzerland.
The EUR/USD and USD/CHF pair decouple when there are divergent political or monetary policies.
Arbitraging the two currencies in an attempt to capture the interest rate differential doesn't always work.
The U.S. dollar is the dominant currency and the largest economy in the world so its strength or weakness impacts many other nations. A strong relationship between the EUR/USD and USD/CHF is partially due to the common U.S. dollar factor among the two currency pairs but the bilateral EUR/CHF relationship is stronger due to the closer ties between the eurozone and Switzerland.
IN SUMMERY EURCHF IS BEARISH.