Technical Analysis

EUR/CHF rises above parity for the first time since July

The Swiss franc is struggling badly today across the board with Swiss 10-year yields down 14 bps to 1.26%

Nowhere is it more stark than against the euro where the pair shot above the 200-day moving average and parity.

The market is feeling increasingly good about the outlook for Europe as the good weather continues. TTF prices are down another 6% today and the economic data has held up much better as well. Italian retail sales today were strong, up 4.4% in November while yesterday’s French industrial data beat expectations.

The market also keyed on the comment from the ECB’s Centento yesterday as he said they are approaching the end of the interest rate rise process and that inflation will fall again from March. While that would hurt rate differentials, the market is more concerned with growth right now, especially given cheap European valuations and washed out sentiment.

Technically, the break today is a great sign for the bulls. It comes after months of consolidation with little near-term resistance.

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