The plunge in early August when markets were throwing a tantrum was held by the December 2023 lows, at least on the daily chart. But even so, the pair has been trending in a lower highs, lower lows pattern ever since June this year.

EUR/CHF daily chart

The trend speaks to a check back in optimism in European equities in particular as well. That especially following the French snap election. But it also comes as bond yields fall and broader markets are also holding more cautious, even more so after the carry trade unwind episode.

And if risk trades are to falter again amid a softer US labour market report, that may be a good enough recipe for EUR/CHF to retest its record lows under 0.9300 next. That as market players will be chasing a flight to safety.

The consideration now is how much are markets really afraid of a hard landing in the US and the overall global growth outlook. Sure, employment conditions are softening but other data continues to suggest that things aren’t that bad for the US economy. But even so, are we going to see markets overreact again?

While the focus is on the Fed and the debate on 25 bps vs 50 bps this month, any tantrums thrown by markets will impact risk-related currencies. And EUR/CHF is one of that, so it is one I’d keep an eye out for – especially considering the charts.

If validated, the only key risk to any further downside is actually the SNB. The central bank has noted that they are watching closely the franc and have come out to say that its recent strength isn’t too welcome for the economy.

As such, there could be the potential for the SNB to intervene if things go too far, too fast.