Technical Analysis
- SNB Rate Cut: The Swiss National Bank (SNB) lowered its policy rate by 25 bps to 0.25%, marking its fifth consecutive cut since March 2024.
- CHF Reaction: The Swiss franc weakened following the announcement:
Fundamental Factors Affecting CHF
- High Global Uncertainty:
- Trade tensions caused by President Trump’s tariff policies remain a significant risk factor.
- Geopolitical tensions and potential trade barriers add to downside risks.
- Low Inflationary Pressure:
- Swiss inflation fell from 0.7% (Nov) to 0.3% (Feb), prompting SNB action.
- GDP growth forecast: 1-1.5% in 2025, 1.5% in 2026, suggesting continued moderate expansion.
- Market Expectations & Rate Outlook:
- Most Swiss economists see no immediate need for further cuts.
- Some analysts believe this may be SNB’s last cut, making it the first major central bank to complete its easing cycle.
Key Takeaway for Traders
- CHF may remain weak in the short term as markets digest SNB’s dovish stance.
- Further rate cuts seem unlikely, making Switzerland a potential outlier in the global easing cycle.
- Watch for global trade developments. A more expansionary fiscal policy in Europe could offset some of the SNB’s concerns and stabilize CHF.
NZDCHF – H4 Timeframe
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The price broke up twice on the 4-hour timeframe chart of NZDCHF, with a steady drop forming the retracement. The price action is currently near the 76% Fibonacci retracement level and thus may be rejected from the highlighted demand area between the 76% and the 88% levels.
NZDCHF – H2 Timeframe
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A closer look at the highlighted higher timeframe demand zone reveals the SBR pattern in the price formation. Price initially swept below the internal low before breaking the bullish structure, adding further confluence to the bullish sentiment.
Analyst’s Expectations:
Direction: Bullish
Target- 0.51379
Invalidation- 0.50051
CONCLUSION
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