The EURCHF has also been trending down since December last year. As you can from the chart above, the pair’s movement and volatility appears to be greater during the past several days. Now if history repeats itself, it could trade flat for like a week or so before trekking lower again. In any case, if and when the pair moves past below the 1.4000 support, it could easily fall down to the 1.3800 marker.
Fundamentally, we all know that the cause of the pair’s recent volatility was due to the ongoing debt crisis in Greece and other European Union (EU) – member nations. Switzerland, on the other hand, is one of the few countries with a relatively robust economy in Europe, making Switzerland a haven of investments especially when there is fear in the market. Investors need to exchange their domestic currencies to Swissy in order to purchase Swiss investments. The demand for the Swiss franc, therefore, becomes higher as investors dump the other currencies like the euro to invest in Switzerland.
Anyway, the debt crisis in the euro zone would not be solved overnight even if the debt-stricken Greece could borrow some more funds to pay their upcoming dues. Still, they would have to pay the new money that they borrowed. They would eventually have to generate cash domestically to pay their debts from the other nations.