EUR/CHF technical analysis: Buyer support emerges at Fr.0.9308

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Euro vs Swiss Franc down 0.53% today

Highlights

Hedge funds increased net short positions in the Swiss franc to a near two-month high as carry trade funding shifted away from the yen.
Greater use of the franc in funding strategies is influencing EUR/CHF liquidity flows and supply dynamics in currency markets.
EUR/CHF trades with short-term bearish momentum and low volatility, with a high probability of remaining in the Fr.0.9308 to Fr.0.9402 range.

Funding flows shift as hedge funds boost franc shorts

Bloomberg reported that, in the week through August 11, hedge funds boosted their net short positions in the Swiss franc to near a two-month high as carry traders shifted to the franc for funding, moving away from the yen due to lower volatility and diminished intervention risk. This repositioning has increased the use of the franc in funding strategies, which may adjust liquidity flows within the EUR/CHF cross. The broader shift in carry activity, combined with heightened institutional short interest, has directly influenced the supply dynamics of the Swiss franc in currency markets.

Oversold indicators intensify with resistance capping upward attempts

EUR/CHF is currently below the MA-20 at Fr.0.9401 and MA-50 at Fr.0.9396 on the hourly timeframe, but remains above the MA-200 at Fr.0.9196 on the daily chart. Immediate resistance is at the Ichimoku Kijun, located at Fr.0.9389. Support for the pair sits at Fr.0.9308, with the upper boundary of the near-term range at Fr.0.9402. RSI stands at 20.74, well into oversold territory; MACD and ADX are both neutral. Stoch RSI and CCI indicate oversold conditions, with Bull/Bear Power signaling seller dominance intraday and the Awesome Oscillator providing a strong sell signal. This setup points to persistent short-term downward momentum despite the cluster of oversold oscillator readings and generally neutral trend signals.

Downside risk prevails amid persistent range-bound trading

In the next two to three trading days, price action is likely to remain within the Fr.0.9308 to Fr.0.9402 corridor, consistent with recent volatility patterns. There is a very low probability of an upward breakout, with downside risk dominating the short-term outlook. Should EUR/CHF break above immediate resistance at Fr.0.9389, a rebound could gain traction; conversely, a decisive move below Fr.0.9308 would open the door for additional losses.

Viktoras Karapetjanc, macro and fundamental expert at Traders Union, highlights that institutional investors are increasing their short positions in the Swiss franc as carry trading dynamics shift. He sees this as a sign of confidence in using the franc for funding, but notes it also boosts downside pressure on the currency versus the euro. The analyst believes the strong presence of sellers, combined with multiple oversold signals, indicates the short-term bias for EUR/CHF remains downward. However, he remains constructive on a potential rebound if resistance is reclaimed. "If EUR/CHF holds above support at Fr.0.9308, the risk-reward starts to favor buyers looking for a technical recovery within the current range."

Earlier, analysts noted that EUR/CHF maintained a broadly bullish technical structure despite short-term pullbacks, with traders advised to watch for potential upside moves pending key resistance levels. The current environment, marked by heightened hedge fund short interest in the franc and oversold technical readings for the pair, introduces increased two-way volatility and suggests traders should monitor for a break on either side of the Fr.0.9308–0.9402 range in the sessions ahead.

Source of Data: EUR Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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