#1: Stagnation and Resurgence of the Swiss Franc
Since the beginning of October, the Swiss franc (CHF) has gone through a phase of stagnation followed by a slight weakening against the euro (EUR). However, analyzes based on seasonality anticipated a reversal of the trend at the beginning of November, which was confirmed on November 8, following the electoral victory of Donald Trump.
Historical data over the last 3, 5 and 7 years shows that this period generally corresponds to a strengthening of the CHF. The seasonal correlations are clear: an upward trend in the franc is often observed until the beginning of January, with an average return of +1.9% in more than 70% of cases.
#2: Technical Factors Supporting a Rise
Technical analysis revealed a “wedge” (or wedge). This pattern generally signals a marked trend exit, either upwards or downwards. Currently, the odds favor a bearish exit for the EUR/CHF rate. This hypothesis is reinforced by the current dynamics and the positions of large investors.
Projection : Based on the amplitude of the wedge, the CHF could reach 1.10 against the euro by the end of December 2024i.e. one EUR/CHF at 0,90.
#3: Influence of Institutional Investors
The TOC report (Commitments of Traders), published weekly, provides an overview of the positions of large institutional investors. Since the beginning of 2024, they have maintained short positions on the CHF. However, a recent change has been observed: these players are starting to close their short positions to turn to long positions, indicating an anticipation of strengthening of the Swiss franc.
Tips for Currency Changers
For individuals wishing to change their Swiss francs into euros, it is advisable to wait until the end of the year, if possible. This period could offer more favorable rates thanks to the anticipated strengthening of the CHF. However, in the event of an urgent need, it remains prudent not to wait indefinitely, because forecasts remain sensitive to unforeseen events, particularly geopolitical ones.
Summary of Trends
All of the analyses, whether technical, fundamental or based on institutional positions, point towards a continued appreciation of the Swiss franc until the end of December 2024 or the beginning of January 2025. Factors supporting this trend include:
– The correlation with upward seasonal cycles.
– A technical wedge pattern suggesting a bullish breakthrough.
– The repositioning of institutional investors in favor of a strong CHF.
The current outlook suggests a significant strengthening of the Swiss franc against the euro. To take advantage of the best exchange opportunities, it might be strategic to wait until the end of the year before exchanging your Swiss francs.
Would you like to know the forecasts for the EUR/CHF rate for early 2025? Participate in the next webinar on 12/13/2024 at 12:30 p.m.
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