A snippet from JPM on the euro against the Swiss franc

  • EURCHF ... Despite increased levels of intervention, a substantial risk rally, and a relatively stable euro, this cross is struggling to bounce even 10 pips at the moment.
  • One can certainly justify a tactical long here ahead of 1.05, but potential slippage on a stop below 1.05 is somewhat of a concern given how minimal the bounces are and the damage a meaningfully slipped stop would do to the risk/reward profile of being tactically long.
  • Stopping out below 1.0505 instead of 1.0500 is one way to potentially deal with this concern, although of course that requires one to stop out just above a major level instead of just below, which feels counter-intuitive.

JPM's view:

  • leaning more bearish on the euro broadly
  • any tactical EURCHF longs above 1.05 need to be tightly managed.
euro Swiss franc chart eur/chf

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ps. I posted on the SNB over the weekend, including a harsh history lesson from a prior EUR/CHF move …