AUTOREFRESH 
EUR/CHF: 20billion+ in stop-loss sell orders between 1.1980/99
By Sean Lee || February 3, 2012 at 03:18 GMT
|| 24 comments || Add comment
If you’re long EUR/CHF, it might be worth considering a square-up before the weekend just in case those stops get smashed on Monday morning. I’m sure you’ll be able to get back in at similar levels on Monday morning?
Another question worth considering, is whether the SNB have credit limits in place to handle that amount of turnover? On a Monday morning? Too risky for me this pair, best avoided, sit back and wait for trading opportunities imho.
US Dollar nfp report and unemployed rate may fall from previous or expectation. as this time just after christmas the job market(specially shopping centre, restaurant, hotel etc are quite). people who recruited for the christmas short time contract were loose the job due to xmas finish. so yen, aud, gbp, chf might be strong after the report release.
if i am in snb i may sell some chf now, and take it to 122.040 before report release.
Thanks for info and an excellent advice, Sean. Thats a BIG number. Do you think NFP could or have it in it to trigger this level?
Hey Sean, really at a loss on how to approach EUR/USD at NFP in morning. Case could be made for breakout on strong number(risk on ), or weak number (QE 3 hopes). What is your take?
Hmmm, interesting. Makes one wonder if the SNB will work out a deal with the banks to wash out those stops first and then then peg the pair. Or will SNB just peg the pair before 1.20 and not allow the stops to be taken out. Makes one wonder if there isn’t some back room deal being worked out between SNB and the banks with reference to all that money in stops.
Good point Sean.They didn’t a couple of years ago in Asia when bidding at 1.4910 when the rest of the market was 1.4850 offered. Think some guys did pretty well that day.
Sean,
Followed your earlier suggestion to trade this as a Monday London session through Thursday trade with pretty good success.
Didn’t get the bgi bounce to the upside that I had hoped for but worked out fine as a repeated range trade for same number pips.
Thanks for the idea!
hi sean. what do you think about my NFP and unemployment analysis? do you agree with me? thanks
Hi J, I don’t think the stops will be triggered during normal mkt operations, that’s why I think early Monday is dangerous time
Certainly possible Sabbir, but banks have so many analysts working on these figures that I’m sure they take most things into consideration so I think the number will be close to expectations
The herd mentality is on grande display in this pair. Whatever
you do, don’t put a stop loss just under 1.20. You would be
better off selling short now with a limit profit just under 1.20.
Great advice, on the other hand, it could be good to go short just before the close and enter a limit order to sell at 1.9950, and if the big 1.2000 support was tripped Monday morning, you would be able to cash in at the very bottom, before intraday bankers bid it back up covering. It would be unlikely that your order would fill at the order price, when there is a huge rush of orders, but just incase you will get 50 plus pips out of the deal for a good start of the week.
Sean, excellent info on the EURCHF – that 20Billion in stops is really crying out to be hit! If I were the SNB, i’d let the market drop to around 1.15 – 1.12, lure more people into going short and then provide as much CHF as needed to pull the pair up to 1.25. This will teach the punters a very painful lesson that they will never forget, and reinforce the SNB credibility.
BTW, has anyone done an analysis of how Hong Kong been able to maintain its peg to the USD at 7.8 for close to 30 years, despite having a free forex market?
Thank Sean.
Its such a serious question of credibility for SNB.
This pair look interesting.I think it should spike high as traders look to establish longs at this level and we got support of SNB,if therrun out of steam it could all go down but untill we have snb we think for a move higher to higher.
This pair look interesting.I think it should spike high as traders look to establish longs at this level and we got support of SNB,if therrun out of steam it could all go down but untill we have snb we think for a move higher to higher.
Hi, Well interest seems buying this pair on drop.So we got to sit tight and hold .i guess.This trades worth even if we hit a small stop loss.
20B….how will you count this ?
Makes you wonder what proportion of those orders were left as hedges by Nestlé, Novartis, Swatch and the likes and if SNB can justify the pain they would incur should the floor break…
Also wonder how much of that 20b are position openers with trailing stops to benefit from the break
20B, would have expected much more than that….
What about if SNB on weekend move to 1.30 EUR/CHF?
Sean,
You sound like the SNB is entering in trades manually. Also, is the SNB’s FOREX guy in the basement office sleeping on Monday? With all those stops do you really think the SNB is going to let it go? C’mon man. The run on the peg has been made and the verbal intervention is going to get us sideways to up from here.
Thanks for nice sharing. I really appreciate to this blog.