A Fresh Rejection at Resistance Could Trigger Another Move Lower

Summary:

This configuration suggests that the current recovery has yet to establish sufficient strength to challenge the broader bearish momentum.

Sell EURCHF

EXP

PENDING

0.93630

ENTRY

0.91880

TGT

0.94150

0.93145 +0.00028 +0.03%

Point

PENDING

0.91880

TGT

CLOSING

0.93630

ENTRY

0.94150

Swiss National Bank (SNB) Vice Chairman Antoine Martin acknowledged early on Thursday that the economic outlook remains subject to a significant degree of uncertainty. However, Martin ruled out interest rate increases in the near term, stating that “We remain comfortably within the 0% to 2% price stability range.” His comments suggest that the current inflation environment does not justify an immediate adjustment to monetary policy, despite the uncertainty surrounding the broader economic outlook.

Recently released Swiss Consumer Price Index (CPI) data showed that annual inflation accelerated to 1.0% in September from 0.8% in August. However, monthly inflation moderated to 0.0%, following the 0.4% increase recorded in the previous month. While the annual reading indicates a modest pickup in price growth, the monthly figure suggests that inflationary pressures remain relatively contained.

The SNB kept its policy rate unchanged at 0% in September. Reinforcing this cautious outlook, Vice Chairman Martin stated that no adjustment is currently necessary, pointing to low and stable inflation and limited spillover risks as evidence that the Swiss economy is performing well. His remarks indicate that the central bank sees little immediate need to change its policy stance, provided that inflation remains within the price stability range.

The European Central Bank (ECB) is facing similar inflationary pressures, with further interest rate increases remaining a possibility. However, rising energy costs and the widening yield spread between French and German government bonds, amid concerns about France’s fiscal position, are increasing the risks to economic growth and financial stability. These competing pressures are complicating the central bank’s policy outlook, as policymakers weigh the need to contain inflation against the potential consequences of tighter financial conditions.

The spread between French 10-year Obligations Assimilables du Trésor (OATs) and their German Bund equivalent widened to 141 basis points on Monday, marking its highest level since the 2012 financial crisis. Meanwhile, student protests have continued for a third consecutive week, adding to the challenges facing a government that lacks sufficient parliamentary support to implement significant reforms in the near term, at least before the 2027 presidential election. The combination of political uncertainty and rising borrowing costs continues to place pressure on the French fiscal outlook.

France aims to reduce its budget deficit to 5% of GDP by 2027, with parliamentary discussions on the proposed plans expected to begin this week. However, securing support for substantial spending cuts could prove difficult in a divided parliament. With public debt approaching 119% of GDP, markets are increasingly concerned that a failure to approve the proposed measures could intensify doubts about the sustainability of France’s public finances and place further pressure on government bond yields.

Elsewhere, Spanish Prime Minister Pedro Sánchez called an early general election for November 29 after parliament rejected two housing-related decrees proposed by his minority government. The decision adds another political development to the European outlook, as governments across the region face challenges in securing legislative support for their policy agendas. A Fresh Rejection at Resistance Could Trigger Another Move Lower_1

A Fresh Rejection at Resistance Could Trigger Another Move Lower_1

Technical Analysis

EURCHF appears to have initiated a downward corrective movement, with price action establishing a resistance level around 0.9363. The pair was previously rejected from this area, triggering a decline toward the local support level at 0.9274. At present, the same resistance zone is aligning with the 200-period moving average, currently positioned at 0.9361, while the 100-period moving average remains slightly higher at 0.9398. If EURCHF retests this resistance area and encounters renewed selling pressure, the bearish momentum could resume, potentially driving the pair toward the next local support level at 0.9188. This level represents a further downside target if sellers regain control near the moving-average resistance zone.

Regarding the oscillators, the RSI is currently at 46, remaining in bearish territory while still leaving room for upward momentum to develop. The indicator’s position suggests that the pair could continue recovering toward resistance before a clearer directional move emerges. Meanwhile, the MACD shows a bullish histogram that remains relatively shallow, while its signal lines are still firmly within bearish territory. This configuration suggests that the current recovery has yet to establish sufficient strength to challenge the broader bearish momentum. For now, the focus remains on identifying potential selling opportunities at key resistance levels, particularly if price action confirms a renewed rejection and the downward movement resumes toward local support.

Trading Recommendations

Trading direction: Sell

Entry price: 0.9363

Target price: 0.9188

Stop loss: 0.9415

Validity: Oct 23, 2026 15:00:00

Risk Warnings and Investment Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

Quick Access to 7x24

Quick Access to More Editor-selected Real-time News