That’s not being disingenuous to Mike’s great post earlier (from the bears mouth too
) but looking for clues is what we do here and a couple of simple ones have shown themselves over the last couple of sessions.
Firstly we only saw a mild rebound in the pair after the Ukraine peace news yesterday which suggests that there’s not much safety money in the swissy. Secondly the move today is as it should be, based on normal rate differentials.
There are many who scratch their heads over moves in this pair often, me included, but these are more “normal”.
Is the pressure now on the SNB to intervene? Yes and no. The swiss economy isn’t exactly in great shape itself and so before any intervention the SNB is more likely to change policy to suit themselves. The only way they can go on rates is negative and that might be the least they do to counter the effects from the ECB. The Danes have already countered the ECB with a cut to -0.05% from +0.05% after the ECB, so the SNB may choose that route before talking about the floor at 1.20. Their next meeting (which they run quarterly) is on the 18th Sep so unless they have to step in before then, that’s the likely point we could see some action.
In the meantime the last decent level before the poo edges closer to the fan is 1.2030
EUR/CHF Daily chart 04 09 2014
