So what exactly did we learn from the Swiss gold referendum?
Not a lot really, and it will soon be a distant memory if it isn’t already
But we learned a couple of things I guess ( apart from confirming that the market loves any over-hyped occasion)
1) The world and his Mum are long of EURCHF ( I mean, even I bought some on Friday evening near the lows on a referendum play) but equally keen to take profit on those fresh longs hoping, that if it happens enough times, it might help bail out the longs they have from 1.2300+
2) Gold and the metals market in general are in a sorry state amidst a global slowdown that should be a concern to us all, and with the shiny stuff posting lows of $1142 before steadying, silver down to 5-year lows of $14.42 and iron ore still on the back foot. Oil price/inflation weakness only adding to the pressure
So EURCHF is a buy-dip, sell-rally play in a probable range of 1.2010-1.2060 for the time being and I’ll be happy to play either side of that. I’m currently square after taking some profit on those longs albeit too early but I’m also still convinced that we haven’t seen the last of the pressure into 1.2000 just yet either. The ECB’s action/rhetoric or lack of it on Thursday will keep traders and the SNB well focussed still.
But at least we’re down, or have been down to, levels where being long finally makes sense, even though right here at 1.2030 presents little value for either side for fresh trades