How to Trade the EURCHF Currency Pair

Jitanchandra Solanki
9 Min read

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. 

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 the FREE Forex 1010 course below to sharpen up your forex trading skills and knowledge!

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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.

Source: Admirals MetaTrader 5, EURCHF, Monthly - Data range: from 1 Apr 1993 to 28 Oct 2022. Performed on 28 Oct 2022. Please note: Past performance is not a reliable indicator of future performance.

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.

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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. Admirals has a deep library of articles that cover Forex indicators, Forex analysis and Forex strategy.  

The Admirals 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.

Source: Admirals Premium Analytics, 28 October 2022

For example, after opening an account you can gain access to the Admirals Traders Room 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.

Source: Admirals Premium Analytics, 28 October 2022

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 Admirals MetaTrader platforms have a large range of technical indicators to use. Having access to automated technical analysis ideas can also be a great addition.

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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.

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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.

 

About Admirals 

Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today! 

INFORMATION ABOUT ANALYTICAL MATERIALS:   

  • The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals’ investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:   
  • This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.    
  • Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content. 
  • With a view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for the prevention and management of conflicts of interest. 
  • The Analysis is prepared by an independent analyst, Jitanchandra Solanki (analyst), (hereinafter “Author”) based on their personal estimations.    
  • Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.    
  • Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed. 
  • Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved
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