EUR/CHF Bears Eye Breakdown of Key Support as Momentum Weakens

Market Overview

EUR/CHF has slipped under moderate pressure this week as investor sentiment remains cautious ahead of Friday’s eurozone inflation figures. Traders are reassessing their positions amid growing uncertainty about the European Central Bank’s next steps, particularly with inflationary dynamics still diverging across member states. In the meantime, the Swiss franc continues to benefit from its haven status during pockets of global market indecision. This cautious environment has allowed CHF to regain some ground, particularly against the euro, which remains vulnerable to macroeconomic and policy shifts.

Technical Analysis

On the 4-hour chart, EUR/CHF has lost short-term bullish momentum after trending higher since mid-April. Price action has now broken below the 34-period moving average and is testing the critical support zone near the previous swing low of 0.93614. A confirmed break below this level would open the door for a bearish extension toward the confluence of the ascending trendline and the 100-period moving average near 0.93491. If that area gives way, further downside targets are projected at 0.93335 and 0.93162, aligning with prior demand zones.

Momentum indicators lean bearish. The RSI has dropped below the neutral 50 level, while MACD bars remain below zero, indicating growing downside pressure. However, continued downside traction depends on sellers closing decisively below 0.93491. Should buyers hold this region, a retracement toward resistance at 0.93787 may unfold, though only a break above 0.94066 would invalidate the short-term bearish bias and re-establish bullish control.

Key Technical Levels

Resistances: 0.93787, 0.94066

Supports: 0.93491, 0.93335, 0.93162

Fundamental Drivers

All eyes now turn to Friday’s eurozone inflation release, which may provide fresh clues regarding the ECB’s future policy path. A higher-than-expected reading could revive hawkish bets, offering temporary support for the euro. However, if inflation continues to moderate, the ECB may lean further into dovish territory, strengthening the bearish case for EUR/CHF. Meanwhile, Switzerland’s stable inflation and prudent fiscal policy continue to underpin demand for the franc in times of broader market unease.

Conclusion

EUR/CHF risks deeper losses toward 0.93335 and 0.93162 if sellers breach 0.93491. Bulls need a breakout above 0.94066 to regain control.

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