How to Trade the EURCHF Currency Pair
While Switzerland is not a member state of the European Union (EU), it is closely associated through more than 100 bilateral treaties which allows it to participate in some areas of the EU’s single market.
In the past, the Swiss franc was pegged to the euro at an exchange rate of 1.20 francs to 1 euro. However, this was abandoned in January 2015 causing a EURCHF crash and increase in volatility.
As the EURCHF exchange rate reached parity (1 EUR = 1 CHF) in 2022, some analysts cite the increasing probabilities of another peg. Learn how to trade the EURCHF currency pair in this article.
Table of Contents
How does the EUR/CHF Exchange Rate Work?
The euro vs Swiss franc exchange rate shows how many Swiss francs it takes to purchase 1 euro. If the EURCHF exchange rate was 1.2000, this means it takes 1 euro (EUR) to buy 1.2000 Swiss francs (CHF).
What are the EURCHF trading hours? You can trade the EURCHF exchange rate 24 hours a day, 5 days a week but most of the volatility is likely to be around the European session (7 am – 4 pm GMT).
Forex traders use financial products such as contracts for difference (CFDs) to speculate on the price direction of currencies such as EURCHF. As the trader is merely speculating on price direction, they can potentially profit from both rising and falling prices by short selling.
CFDs also allow traders to buy and sell on margin. This means a trader can open a larger position size using a smaller deposit which is held as margin. This can help to amplify both winning and losing trades.
Learn more about the different risks and benefits of CFDs in The CFD Trading Guide. Alternatively, check out our free trading course below to sharpen up your forex trading skills and knowledge!
EURCHF Forecast & History
The EURCHF exchange rate traded around 2.4742 in 1973. In June 2022, the exchange was trading at parity. This is where 1 EUR equals 1 CHF – an exchange rate of 1.0000. While the currency pair has been in a very long-term downtrend, the most important part of the EURCHF history was in the run-up to 2015.
In September 2011, the Swiss National Bank (SNB) decided to peg the Swiss franc to the euro at an exchange rate of 1.2000. This was in response to international investors buying up huge amounts of Swiss francs as a safe haven instead of buying euros during the European debt crisis.
The extreme overvaluation of the currency forced the SNB to fix the exchange rate. However, in 2015 the SNB shocked the market by removing the peg to the euro. This was largely due to the fact the euro depreciated considerably against the US dollar during that time.
When the SNB removed the peg from the 1.2000 EURCHF exchange rate, its price collapsed by around 30% to a new low of 0.8500. Over the next few years, the exchange rate clawed its way back to 1.2000 by April 2018.
However, since then, EURCHF has been in a long-term downtrend with traders looking to see if the price will retest the lows from the EURCHF crash in 2015.
Stay up to date with the latest market trends and strategies by tuning into Admiral Markets’ FREE live trading webinars.
EURCHF Investing Analysis Techniques
There are a variety of analysis techniques that traders use to make EURCHF buy or sell decisions. This can include technical analysis, fundamental analysis, sentiment analysis and correlation analysis.
EURCHF Technical Analysis
Technical analysis is one of the most popular ways to analyse a market. This involves the study of chart patterns, indicators and price data to identify patterns of buying and selling. Admiral Markets has a deep library of articles that cover Forex indicators, Forex analysis and Forex strategy.
The Admiral Markets premium analytics section can also help in performing technical analysis. The research terminal provides bearish and bullish biases, while the technical insight tool lets traders know when different technical events are taking place in a market.
For example, after opening an account you can gain access to the Admiral Markets Dashboard where you can access the premium analytics section, as shown above. This enables traders to quickly find technical analysis events taking place on thousands of markets, including EURCHF.
This area also allows traders to access the Featured Ideas section. This provides actionable trading ideas on a range of different currency pairs and timeframes, as shown above.
Traders can also choose to learn technical analysis for themselves. The Admiral Markets MetaTrader platforms have a large range of technical indicators to use. Having access to automated technical analysis ideas can also be a great addition.
EURCHF Fundamental Analysis
Fundamental analysis is regarded as the study of fundamental and economic data such as interest rates, employment figures, inflation and more. A country’s central bank controls the monetary policy of an economy and, therefore, has a huge impact on the direction of a currency.
For example, one role of the European Central Bank (ECB) is to adjust interest rates to keep inflation at a normal level. In 2022, the ECB started to increase interest rates in the face of record-high inflation.
The Swiss National Bank (SNB) also announced an interest rate rise in 2022 bringing its key rate back into positive territory since 2015 and no longer the world’s lowest. As the ECB announced more of an aggressive plan to increase rates than the SNB the EURCHF rallied from the end of September to October 2022.
However, in the long-term weekly chart, this represents a bear market rally situation. The real test is if the price reaches parity once more (an exchange rate of 1.0000) and how the exchange rate moves from this important level.
How to Start Trading EURCHF
Did you know one of the best ways to test your trading ideas is by using a demo trading account? This type of account allows you to buy and sell in a virtual environment until you are confident to go live. You can open a free demo trading account in just a few minutes.
FAQs on Trading EURCHF
What is the best time to trade EURCHF?
You can trade EURCHF 24 hours a day, 5 days a week. However, most of the volatility and price movement is likely to be around the European market opening and session around 7 am to 4 pm GMT.
Is EURCHF a good pair to trade?
EURCHF can be a good pair to trade for educated traders who have a proper trading plan and exercise good risk management. The currency pair can be volatile providing consistent trends over time. However, volatility can be good and bad so try a demo trading account first to test your skills.
Other articles you may find interesting:
- 3 Tech Stocks to Watch in 2023
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- The Swing Trading Strategy Guide for 2023
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