Currency Charts: EUR to CHF

The pair of euro and Swiss franc are in the condition of the permanent correlation. That’s why it isn’t the top one among the traders. The period of establishing interest rates coincides with the main trading period.

Interesting facts

The long-term trend is one of the features of the euro and Swiss franc pair, which makes it rather enjoyable. Traders oriented on Swing Trading prefer to choose it. The connection with the American dollar is considered to be one of the chief features of the asset.

It’s necessary to consider this fact. That’s why the strength or weakness of the dollar influences both the euro and the franc directly. But it is expressed differently for every currency. As a result, we can see the currency corridors with the opportunity of getting a big spread.

Besides, the US economy is the biggest one worldwide, that’s why its strength influences many other countries. Even though the tight relationship between EUR/CHF and USD/CHF is explained partly by the common dollar factor, they are much stronger compared with other currency pairs. The explanation is in the strong ties between the Eurozone and Switzerland.

Switzerland, which is surrounded by its Eurozone members, has tight economic and political connections with its bigger neighbors. All of that began from the pact about free trade, which was approved in 1972.

After that, more than 100 two-sided agreements were made. They allowed opening the Swiss employment market to the EU citizens and attracting thousand of excellent specialists. As long as the two economies are very well connected, in case of lowering the positions of Euromarket, Switzerland will also feel this.

The trading with this pair is understandable even though we see the ties and a direct dependence from the dollar. The experienced traders still remember 2011, when the investors were getting rid of euros before the statement of the European Central Bank. The quotes changed for 1000 points for a couple of hours.

This doesn’t happen often, and the pair can surprise you by suitable corridors and allow earning the right margin.

How to trade

Bets on EUR/CHF can be made only in the long-term prospect. The market possesses low variability, but within the day timeframes, you can experience sharp shifts, which will provoke stop-losses activation in case you use them.

You should conduct technical analysis and determine the bottom to avoid the losses. In 90% of cases, the fluctuations never take a whack during the trading session. This indicator can be considered a constant one within a rather stable economic situation.

To trade EUR/CHF successfully, you should put stop-loss 50 points lower the bottom you determined. You shouldn’t panic if you notice the trend moves in the other direction. The pair is exceptionally stable, that’s why the rate will go up in the end.

There’s no need to be greedy with the profit – 100-150 points with this instrument considered to be a good indicator. Wise using leverage will give you a nice benefit.

EUR/CHF can suddenly change the trend despite market stability. It usually happens as a reaction to the news from the bank sector. In this case, a trader will experience losses. That’s why it’s not a good idea to put more than 10% of the capital to the opened order.

Active trading before the reports from the big European and Swiss companies should be avoided. You should be careful a couple of days before declaring a new interest rate according to the EU.

And of course, it’s significant to remember that the Swiss franc is a stable currency. National bank weakens it on purpose. When the money is issued, the rate is very unpredicted and instable.

You can get a benefit at that time or lose the whole deposit. For this reason, traders prefer more liquid and safe assets when the volatility hits the limits.

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