The SNB decided to keep rates on hold at 1.75% and dropped ‘further tightening’ from the statement. The rebound in EUR/CHF grinds to a halt around 0.95 however after the central bank maintained the willingness to intervene in FX markets (selling foreign currency). 

It will continue to monitor the development of inflation closely and will ‘adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term’. It lowered the inflation forecast to 1.9% for 2024 and 1.6% for 2025 based on unchanged policy rate of 1.75%.

EUR/CHF has recently defended key graphical support of 0.9410 corresponding to lows of last year and October. This test has led to a quick bounce; a retest of 0.9580, the 61.8% retracement from last month can’t be ruled out. Trend line drawn since 2021 near 0.9620/0.9700 which is also the 200-DMA could be an important resistance zone. It would be interesting to see if the pair can reclaim this and confirm a larger up move. In case the pair fails to defend 0.9410 there would be a risk of an extended downtrend.