EUR/CHF Pair Rises as Interest Rate Differential Attracts Carry Traders
The EUR/CHF pair has been gaining strength as the European Central Bank (ECB) raises interest rates, creating an interest rate differential with the Swiss National Bank. This difference is attractive to traders who engage in carry trades, where they borrow at a low-interest rate and invest in a higher-yielding currency.
Christopher Lewis, a technical analyst at DailyForex, notes that this pair has been a boon for the euro against the Swiss franc due to the strong carry trade. He believes it will continue to perform well as long as there is no significant shift towards safety currencies.
Lewis suggests buying short-term dips in the EUR/CHF pair, with support levels at 0.94 and the 50-day EMA at 0.9338 if broken down below that level. He also forecasts a target of 0.95, followed by 0.9625 above.