The EUR/CHF price has been consolidating at its lowest level since January 2015 as the euro sell-off continued. The pair dropped to a low of 0.9752, about 41% below the highest level in 2007. It has crashed by almost 8% from the highest point this year.
ECB and SNB decisions
The EUR to CHF pair has had a strong sell-off in the past few weeks. The sell-off continued in June when the Swiss National Bank (SNB) caught many investors off-guard its 0.50% interest rate hike. This increase was notable since the bank is usually one of the most dovish in the market.
The European Central Bank (ECB) also decided to hike interest rates by 0.50% to fight the red hot inflation. It also signalled that it would continue increasing interest rates in the coming months. It was the first time the ECB had increased rates in more than 11 years.
The EUR/CHF pair is falling as investors react to the weak economic data published on Monday. The numbers revealed that Germany’s retail sales dropped in June. It was the biggest decline since Destatis started collecting the data. Furthermore, manufacturing and services PMIs continued weakening as well.
The next key catalyst for the euro to Swiss franc exchange rate will be the upcoming Swiss PMI data and Q3 consumer confidence estimate by SECO. Analysts expect that Switzerland’s PMI dropped slightly from 59.1 in June to 57.1 in July this year.
EUR/CHF forecast
The EUR/CHF price has been in a strong bearish trend in the past few months. The sell-off led to the pair falling below the parity level at 1.000. It also declined below the critical support level of 0.9805, the lowest on June 13th. The pair also dropped below the 25-day and 50-day moving averages, while the Relative Strength Index (RSI) points upwards.
The pair will likely continue falling as sellers attempt to move below the critical support at 0.9700. A move above the resistance at 0.9800 will invalidate the bearish point.
