EUR/CHF falls back into 0.9450 as EU data misses the mark, European PMIs come in mixed

The EUR/CHF has pared back Monday's gains as the Euro (EUR) falls back against the Swiss Franc (CHF) following a pan-EU Purchasing Managers' Index (PMI) data print that came in with mixed results on forecasts, souring European investors' appetite on Tuesday.

German Preliminary Manufacturing PMI jumps to 40.7 in October vs. 40.0 expected

Germany's PMIs for October came in mixed, with the headline Composite PMI declining unexpectedly, with a minor uptick in the Manufacturing component failing to offset a steeper-than-expected decline in the Services side of the indicator.

While Germany's manufacturing sector saw a continuation of recent growth, the expansion was moderate at best, with the Manufacturing PMI printing at 40.7 against the expected 40.0, and gaining ground over September's reading of 39.6, though the improved manufacturing figure leaves purchasing manager expectations still deeply in contraction territory below 50.0.

The German Services PMI broadly scratched market expectations, falling into contraction territory once more and printing at 48.0 versus the forecast 50.0 and steepening the decline from September's 50.3.

Eurozone Preliminary Manufacturing PMI unexpectedly drops to 43.0 in October vs. 43.7 expected

On the pan-EU side, PMIs came in broadly red, missing market estimates with the headline PMI Composite for October declining to 45.8, flubbing the expected uptick to 46.7 and falling further into the red from the previous month's 47.2.

Purchasing manager expectations across the European Bloc's manufacturing sectors are expecting conditions to continue to deteriorate, while PMIs for the services component ticked lower, failing to hold steady at September's index print.

EU-wide Manufacturing PMIs settling into 43.0 versus the expected uptick into 43.7, flubbing the previous reading of 43.4, while the Services component printed at 47.8, failing to hold at 48.7 as markets expected.

With EU PMI figures out of the way, EUR/CHF traders will be looking ahead to Switzerland's latest ZEW business expectations survey due on Wednesday, followed by a speech from European Central Bank (ECB) President Christine Lagarde. The Swiss expectations survey last printed at a begrudging -27.6, while ECB President Lagarde will be speaking while attending a dinner hosted in Athens by the Bank of Greece.

Euro traders will also be keeping an eye out for the ECB's latest rate call and Monetary Policy Statement landing at 12:15 GMT on Thursday, where the ECB is broadly expected to keep their main reference rate on hold at 4.5% as the EU grapples with a wobbly domestic economy.

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EUR/CHF Technical Outlook

The Euro remains firmly underbid against the CHF after setting a new low of 0.9417 for 2023 last Friday, and the EUR/CHF has done little but decline steadily since the year's early peak at 1.0097.

A bearish continuation of the long-term trend will see the pair set to crack new lows for the year below 0.915, opening up the way to make a run at 2022's bottom bids of 0.9409. A break below this level would represent new all-time lows for the EUR/CHF since the creation of the EU currency bloc.

On the top side, technical barriers are piling up from a resistance zone between 0.9540 and 0.9600, with the last notable swing high near 0.9693. 

EUR/CHF Daily Chart

EUR/CHF Technical Levels