EUR/CHF Breaks Key Support at 0.9837/16, Credit Suisse Analysts Warn of Substantial Drop to 0.9411 Lows
The euro-to-Swiss franc (EUR/CHF) currency pair has been experiencing significant volatility lately. According to the latest report from Credit Suisse, EUR/CHF has broken a key support level at 0.9837/16. Analysts warn that the pair could suffer a substantial drop to the 0.9411 lows if risk sentiment deteriorates more sharply. This news has sent ripples through the forex market and has made investors wary of their investments in this currency pair.
EUR/CHF has been on a downward trend for the past few weeks. Despite some minor rallies in between, the pair has been unable to gain any significant momentum. The technical indicators suggest that the downside pressure remains strong and that the trend could continue in the near future. The current uncertainty surrounding the COVID-19 pandemic, the US elections, and the renewed trade tensions between the US and China are all adding to the pessimism in the market.
Next Key Support at 0.9714/12 and 0.9643
The analysts at Credit Suisse have identified the next key support levels for EUR/CHF at 0.9714/12 and 0.9643. If the pair breaks through these support levels, it could confirm a bearish trend and open the doors for further downside potential. However, the analysts also note that a move all the way down to the 0.9411 lows is not out of the question if risk sentiment deteriorates more sharply.
Key Resistance at 0.9858/90
On the other hand, the analysts at Credit Suisse have also identified the key resistance level for EUR/CHF at 0.9858/90. This level is the 200-day moving average and a broken trendline, which now ideally caps to keep the risks skewed lower. If the pair manages to break above this resistance level, it could confirm a bullish trend and open the doors for further upside potential. However, given the current market conditions, this seems unlikely in the near future.
Investor Sentiment and EUR/CHF
Investor sentiment plays a crucial role in the forex market, and EUR/CHF is no exception. The current sentiment among forex investors is that the downside potential for EUR/CHF is higher than the upside potential. This is due to the current global economic conditions, which are fraught with uncertainty and volatility. The resurgence of the COVID-19 pandemic in Europe is also adding to the pessimism in the market and is likely to weigh heavily on the euro in the near future.
The Swiss franc, on the other hand, is considered a safe-haven currency and tends to perform well in times of economic uncertainty. This means that if the downside potential for EUR/CHF materializes, we could see a significant rise in the value of the Swiss franc. This would make it an attractive investment option for forex traders who are looking to protect their portfolios against market volatility.
Conclusion
In conclusion, EUR/CHF has broken a key support level at 0.9837/16, and analysts at Credit Suisse warn that the pair could suffer a substantial drop to the 0.9411 lows if risk sentiment deteriorates more sharply. The next key support levels are identified at 0.9714/12 and 0.9643. If the pair breaks through these levels, it could confirm a bearish trend and open the doors for further downside potential. Conversely, the key resistance level is identified at 0.9858/90. If the pair manages to break above this level, it could confirm a bullish trend and open the doors for further upside potential. However, given the current market conditions, this seems unlikely in the near future. The current sentiment among forex investors is that the downside potential for EUR/CHF is higher than the upside potential, making the Swiss franc an attractive investment option for forex traders who are looking to protect their portfolios against market volatility.
