EUR/CHF back into the danger zone

Strange days in EUR/CHF with rumor central yesterday and then some large purchases from a UK clearer overnight. Pulses are thumping a bit faster with the pair down to a low of 1.2006.

I find it hard to believe that someone with an inside tip about SNB action on the weekend would be so foolhardy as to buy billions of dollars at once, moving the market when patient buys would get better fills.

The chart shows downward momentum but it puts the market back where it was early on Thursday so nothing has really changed.

If you think there is a spec of truth in the rumors, it’s better to be long.But here is why I wouldn’t be: if the SNB did have plans for weekend action, they would be shelving them right now because of the the perception they were leaked. After the Mrs. Hildebrand fiasco, they can’t have any more questions.

Shorts still don’t make sense to me in the near term. The peg is hugely popular in Switzerland and they don’t seem to care about the cost. In the longer-term shorts may start to make sense in a euro-breakup panic… but there will be lots of way to make money with that scenario.

http://youtu.be/iPYF2p-cGx8

 

Author: Adam Button

Adam Button is the editor of ForexLive™. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes deeply in the value of knowing every tidbit of news. He has a background in journalism and was formerly the head of the markets team at the Canadian Economic Press. He is a graduate of Ryerson University and completed Level 1 of the CFA program. Adam lives in Montreal, follow him on Twitter: @FX_Button.

9 Comments

  1. Haha. Now you’ve got that song stuck in my head.

    I wonder when they will do a redo of Top Gun.

  2. Johnr, I was just thinking of watching the movie this weekend… for the beach vball scene alone. Who plays beach vball in jeans?

  3. adam,
    where do you see EURO going from this lvl please.
    will there be a decent retrace or will it just free-fall from here.
    thanx.

  4. Europe is getting worse, so the euro will get worse too. The only trade right now is short or on the sidelines. Naturally, you want to wait for a bounce to sell but I have a hard time seeing a bounce over 1.26. If it happens, that’s where I would cut and wait for the larger bounce to fade. If you look at the weekly chart, it tells the whole story. I’ll put it up shortly.

  5. I’m looking to short on a break back to the 1.26-1.2630 ranger which has been resistance. With US closed on Monday, might get a slow churn higher on low turnover

  6. Hey Adam are you still long EUR/CHF or you left it alone?

  7. Thanks for ruining the whole movie for me! I was going to rent it this weekend to finally watch it….. I have a huge beach volleyball tournament and my teammates said this was the best way to get fired up for it! :(

  8. I sold it March 14. I wrote about it here at the time. http://www.forexlive.com/blog/2012/03/14/im-a-eurchf-bull-but/

  9. Oh I must have missed that back then..thank you!

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