Euro is the best performing G10 currency on Wednesday, while Swiss Frank is the top laggard. Euro continues to appreciate on recent hawkish remarks from several ECB members. This narrative was strengthened yesterday by one of the more aggressive officials namely Isabel Schnabel, while Villeroy stated today the need for additional interest rate hikes in the coming months. Meanwhile, CHF weakened recently on growing expectations that price pressure in Switzerland will continue to ease as recent reading showed that the annual inflation rate in Switzerland fell to 2.8% YoY in December from 3.0% in the prior two months, pointing to the lowest reading since April. Also a budding rally in risk assets weighed on the safe-haven currency further.
From technical point of view, EURUCHF pair rose sharply on Wednesday and broke above upper limit of the triangle formation and major resistance at 0.9960, which coincides with 50.0%Fibonacci retracement of the last downward wave started in June 2022. If current sentiment prevails pair may be moving towards parity level or even resistance at 1.0090, which is marked with 61.8% retracement and previous price reactions.
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EURCHF, D1 interval. Source: xStation5
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