24 Sep 2013
EUR/CHF on a corrective pullback
FXstreet.com (Athens)- The EUR/CHF is trying to gather uptrend momentum after the yesterday’s sharp sell-off due to Draghi’s dovish stance and comments on behalf of SNB.
EUR/CHF tries to get out of the woods again; ECB and SNB wounded the cross yesterday
The EUR/CHF was under heavy pressure yesterday, while one could be taken aback by that fact as on Monday we had solid Chinese PMI data, Chancellor Merkel's election victory (even with a “bitter” taste) and comments from Fed’s voting member Fisher who mentioned that he disagreed absolutely with the last week’s FOMC conference that "doing nothing at this meeting would increase uncertainty about the future conduct of policy and call the credibility of our communications into question". However, a more thorough look on the pair would help us understand why it sank. First of all, SNB president Jordan said the Swiss franc is still “highly valued”, therefore the 1.20 cap would not be changed in anyway. On the other hand, ECB president Draghi said the central bank was ready to use any instrument, including another long term refinancing operation (LTRO). We could consider that ECB’S super dovish stance put the cross under heavy pressure. Last but not least, EU's Verwey said that conditions still fragile in Euro land. The biggest challenge is to transition to growth.
Technical and Strategic Bias on EUR/CHF
At the time of writing, the EUR/CHF is trading below 1.2300, at 1.2888 down 0.02% very close to its daily low as of 1.2286. The cross broke clearly the 200-daily SMA at 1.2301, i.e. the trend is bearish enough especially if we bear in mind that price action of the cross is leaving lower highs with each rally in recent months.
EUR/CHF tries to get out of the woods again; ECB and SNB wounded the cross yesterday
The EUR/CHF was under heavy pressure yesterday, while one could be taken aback by that fact as on Monday we had solid Chinese PMI data, Chancellor Merkel's election victory (even with a “bitter” taste) and comments from Fed’s voting member Fisher who mentioned that he disagreed absolutely with the last week’s FOMC conference that "doing nothing at this meeting would increase uncertainty about the future conduct of policy and call the credibility of our communications into question". However, a more thorough look on the pair would help us understand why it sank. First of all, SNB president Jordan said the Swiss franc is still “highly valued”, therefore the 1.20 cap would not be changed in anyway. On the other hand, ECB president Draghi said the central bank was ready to use any instrument, including another long term refinancing operation (LTRO). We could consider that ECB’S super dovish stance put the cross under heavy pressure. Last but not least, EU's Verwey said that conditions still fragile in Euro land. The biggest challenge is to transition to growth.
Technical and Strategic Bias on EUR/CHF
At the time of writing, the EUR/CHF is trading below 1.2300, at 1.2888 down 0.02% very close to its daily low as of 1.2286. The cross broke clearly the 200-daily SMA at 1.2301, i.e. the trend is bearish enough especially if we bear in mind that price action of the cross is leaving lower highs with each rally in recent months.