The comments from SNB alternate member Moser in a WSJ article that the SNB could take rates below 0% to dissuade CHF buying, has sent the EURCHF sharply to the upside (SNB Moser says negative rates remain an option). Looking at the daily chart below, the pair has gotten close to the 38.2% retracement of the last move down from the May 2014 high to the low seen this month. That level comes in at 1.21167. The high for the day is at 1.21148.
Should there be more comments – or even action by the Swiss National Bank to counteract the easing by the ECB – other close levels to target above would include the midpoint of the same move lower at 1.2139, topside trendline at 1.2146, the hundred day moving average at 1.2156, and the 200 day moving average at 1.2190 (see chart below). These are the obvious nearby targets that would need to be broken to switch the technical bias around to the bullish side on the daily chart. They do not represent where ultimately the pair could go of course. Other levels to target above would be the 50% of the 2014 trading range at 1.22178, the 61.8% of the years trading range at 1.22589 (this is also the February 2014 high) and then the high for the year at 1.23923. All are potentially “in play”.
The Swiss National Bank, will be meeting on September 18. Action by the Swiss National Bank does not necessarily need to be taken on that day (in fact, if they want the element of surprise, they might look to announce something on a day other than the scheduled meeting day)
EURCHF gets the first real push higher on SNB news and tests 38.2% at 1.21167
Looking at the 5 minute chart below, the 50% of the move up from the low floor yesterday comes in at 1.2086. This is near the high from last weeks trading. I would expect that buyers would lean against this area (yellow area) on any dips now. A move below does not necessarily take further upside potential out of the equation, but will likely nudge the SNB toward action at some point. So be aware.
The midpoint of the surge higher comes in at 1.2086 in the EURCHF. This is near the high from last week and should be support level for buyers.
