Technical Analysis EUR CHF
EUR CHF for InvestorThe EUR CHF currency pair is included in the group of minor pairs on Forex. Its trading volume is much less than major pairs, which is why its liquidity is at a low level. The EUR CHF consists of two European currencies with different specifics - a stable Swiss franc and a more internally influenced euro.
The pair's volatility is mostly at a fairly low level, except for crisis periods. EUR CHF is most active during the European trading session, and its peak occurs, as a rule, when trading in Europe and the USA crosses. However, even at this time, EURCHF is not very suitable for scalping, despite the low spreads. At the same time, the pair lends itself well to forecasting, which makes it interesting for longer-term investments.
EUR CHF is a classic cross-rate, in which the American dollar acts as an intermediary between currencies.
How to trade EUR CHFTo calculate the minimum amount required to open a trade with a currency pair, the following formula is applied:
(Contract Size * Lot Volume) / Leverage
The standard contract size for EUR CHF is EUR 100,000. So, if we want to open a trade for 0.2 lots with a leverage of 1:200, then we need:
(100000 * 0.2) / 200 = 100 euros
To convert the received amount into dollars, multiply it by the current EUR/USD quote:
100 * 1.10255 = $110.25
How much is a pip EUR CHFDuring the trading day, the EURCHF pair moves on average 30-70 pips. To find out the amount of profit that we will receive if the pair passes 50 points, we need to find the cost of one point using the following formula:
Point price = Lot volume * 1 point
The standard point size for a pair is 0.0001, which means that the price of a point with a trade volume of 0.2 lots will be:
20000 * 0.0001 = 2 CHF
To convert the received amount into dollars, we divide it by the current USD/CHF quote:
2 / 0,97101 = $2,05
Accordingly, if the rate overcomes 50 points (with a volume of 0.2 lots and a leverage of 1:200), the profit from the transaction will be $102.98.
How to trade EUR CHFDespite the fact that Switzerland is in Europe, it is not part of the EU, which is why the economic and political situation in the EU does not have a very strong impact on the franc. However, they have a significant impact on the euro exchange rate.
Among the most powerful factors influencing its quotes are the trade balance, foreign policy relations, as well as interest rates of the European Central Bank.
The euro provides the pair with most of the volatility also because the exchange rate is influenced by the political and economic news of all member states of the Union.
The Swiss franc, in turn, is a more stable currency. During crises, it often serves as a "safe haven" for traders' funds. The reason for this was a stable economy and the legendary reliability of the Swiss banking system, which, due to a fairly high degree of anonymity of customers, is highly valued among foreign investors.
The main factor affecting the exchange rate of the franc is Switzerland's relations with trading partners, since the country actively imports raw materials and exports various products. Accordingly, the indicators of the trade balance have a direct impact on the quotes of the national currency.
Additional stability to the pair is given by the fact that the euro and the franc themselves have a positive correlation, which additionally smooths out fluctuations in the EUR CHF rate.
In addition, the pair also has a moderate direct correlation with other assets, including EUR/NOK and EUR/GBP. An inverse relationship can also be traced between the pair's rate and silver quotes.