Trade Idea: I’m bullish on EURCHF.Europe’s Slow Burn vs. Switzerland’s Defensive Retreat 🔥🛡️
Two central banks, two very different strategies — and one potential opportunity. As the SNB scrambles to weaken its overvalued franc, the ECB is just beginning to pause. That divergence may be the crack where EURCHF bulls find their edge.
📈 Trade Idea: I’m bullish on EURCHF.
Here’s why I think the euro could outperform the franc near-term:
✅ SNB slashed rates to 0.0%, second cut this year — signaling discomfort with franc strength.
🔄 The ECB paused cuts after eight consecutive ones — signaling a shift to “wait and see.”
📉 Swiss inflation is hotter than expected, limiting further SNB easing.
⚖️ EUR strength is boosted by US-EU trade deal optimism, which reduces demand for CHF’s safe-haven status.
💬 Speculative positioning: traders are net short CHF, and net long EUR.
The SNB is stuck. They want a weaker franc to protect exports, but they can’t afford negative rates again. Meanwhile, global risk appetite is rising — and that’s bad news for safe havens like CHF. Add in upside inflation surprises in Switzerland, and the SNB is losing room to maneuver.
On the euro side, it’s not a roaring recovery — but it’s stable. Industrial production is rising, inflation is controlled, and confidence is ticking up. If the US-EU trade deal lands, the euro could gain even more ground as investors shift away from defensives like CHF.
The short-term setup? A defensive SNB, a patient ECB, and a potential EUR tailwind.
Would you take this trade? Or are you still backing the Swiss shield? 👇
