EUR/CHF
The removal of the 1.2000 peg was a memorable day as the Swiss National Bank removed their defence. The result was dramatic as the EUR/CHF went into free fall. Now the saga taught the SNB a key lesson, 'you can't fight wider market fundamentals through currency intervention'. Eventually the truth will out. However, that doesn't mean that you should throw the baby out with the bath water on the influence of currency intervention. It can actually be very effective, when used at the correct time. (A lesson that the RBNZ taught us through three policy on currency intervention). Eamonn had a helpful post on it here too back in August 2016.
Now the Italy and Turkey issues in the market are likely to keep the CHF bid. This is not to mention Trump's general "American First' policy which doesn't shy away from sanctions, hard rhetoric and hard ball negotiating. You never know which country is going to get tweeted about next, so Trump should keep CHF bid too in his current form. So, with the latest COT reports showing that contracts had moved to the shortside for the first time in over a year it is time to remember that the SNB still has a policy of FX intervention in play. The EUR/CHF price recently hit 1.1250 and seemed to find some buying. This was the 50% down move from the fib level. With price also now at the convergence of the 100 and 200 MA on the weekly chart too (see below) near term direction is being decided. Get and stay above the MA's and more upside is in play. If resistance is found at the 100 and 200 MA's and price moves even lower down, rembember the SNB policy of intervention. A longer term EUR/CHF long could start to look good value if current EUR weakness continues. One to watch and have on your radar.
