Where art thou, SNB?

Technical Analysis

Author: Justin Low | eurchf

EUR/CHF breaks critical support in fall to its lowest since July 2015

EUR/CHF W1 19-11
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If there is one central bank that is going to be least satisfied with today's moves, it has to be the SNB as we see EUR/CHF fall past key support at 1.0500 in European trading.

The risk aversion flows is enough to trigger the latest downside shove, leaving little support in the way of a drop towards 1.0300 or even 1.0200 potentially (parity anyone?).

The downtrend has been well intact since late September trading but the technicals were still respected to some extent with traders anticipating and fearing the SNB might intervene to prevent a significant strengthening in the franc.

But now we're starting to see traders run with the break and the onus will be on the SNB to step up after the constant barrage of intervention talks.

For all the talk, total SNB sight deposits have only grown by a measly CHF 5 billion from 1 October to 12 November, not quite signaling too heavy of an intervention.

However, with the technical break above, be wary of any potential pushback by the central bank that could see some unexplained jumps in EUR/CHF from time to time.

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