Fading Bearish Pressure And ECB Rhetoric Point To EURCHF Recovery

Summary:

A bullish crossover appears imminent. If the histogram transitions into positive territory and the signal lines clear the neutral level, we could see a sustained bullish correction.

Buy EURCHF

End Time

CLOSED

0.91583

ENTRY

0.92000

TGT

0.91300

0.91775 -0.00133 -0.14%

417

Points

Profit

0.91300

0.92000

CLOSING

0.91583

ENTRY

0.92000

TGT

The recent surge in the Euro's valuation has officially entered the radar of European Central Bank (ECB) policymakers, reigniting a critical debate regarding the impact of a persistently strong currency on the future path of monetary policy. A firm Euro could, over time, emerge as a complicating factor for the inflation outlook, thereby influencing the central bank's restrictive stance.

In this context, Martin Kocher, Governor of the Austrian Central Bank and a member of the ECB Governing Council, noted that a continuous appreciation of the Euro might eventually necessitate a monetary policy response. Kocher clarified that such a move would not involve direct intervention in the foreign exchange market, but rather an adjustment to address the indirect effects; a stronger Euro naturally exerts downward pressure on inflation, making it a pivotal variable for the ECB's decision-making process. Following these remarks, the Overnight Index Swaps (OIS) market reflected a slight uptick in easing expectations. Traders currently assign approximately a 26% probability to a rate cut at the September meeting, up from the previously estimated 16%. Despite this shift, the broader consensus remains that the ECB will hold its current posture at the upcoming meeting on February 4–5.

Simultaneously, the Swiss Franc (CHF) continues to exhibit relative stability, though it remains notably weak against its antipodean peers. This underperformance persists even after Swiss National Bank (SNB) President Martin Schlegel alerted markets to the possibility of negative inflation episodes in the short term. During his address at the World Economic Forum, Schlegel noted a high probability of inflation dipping into negative territory this year, suggesting that a temporary deflationary period would not pose a significant threat to the broader Swiss economy.

From a domestic perspective, market valuations continue to price in the risk of the SNB cutting interest rates back into negative territory in the coming months. This concern is underscored by a -1.8% year-over-year decline in the December Producer Price Index (PPI), which brings deflationary risks back to the forefront. While January’s CPI held at 0.1%, the trajectory remains fragile, especially when coupled with a weak Manufacturing PMI of 45.8. With the next SNB policy meeting not scheduled until March 19th, the Franc remains vulnerable to further downside if the current 0% policy rate is perceived as insufficient to combat cooling price dynamics. Fading Bearish Pressure And ECB Rhetoric Point To EURCHF Recovery_1

Fading Bearish Pressure And ECB Rhetoric Point To EURCHF Recovery_1

Technical Analysis

EUR/CHF appears to be establishing a local floor after staging a bullish rebound from the 0.9143 support zone. With the outlook for a strengthening Euro gaining traction, this level may represent the definitive local bottom. A bullish correction from this area currently seems highly probable.

On the 1-hour chart, the immediate upside targets are centered around the 100-period Moving Average at 0.9193 and the 200-period MA at 0.9235. Additionally, a significant horizontal resistance is located at 0.9196, which aligns closely with the 100-period MA, creating a high-probability "magnet" for the current recovery.

Our momentum analysis via the MACD reinforces this reversal thesis. Although the signal lines remain below the neutral zone, the histogram is printing progressively smaller bearish bars, indicating that downward momentum is rapidly exhausting. A bullish crossover appears imminent. If the histogram transitions into positive territory and the signal lines clear the neutral level, we could see a sustained bullish correction.

As long as the price maintains its integrity above the 0.9143 handle, long positions are favored. A technical "reset" of the MACD above the zero line would confirm the shift in control, paving the way for a test of the major moving average cluster.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9157

Target price: 0.9200

Stop loss: 0.9130

Validity: Feb 11, 2026 15:00:00

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