10 Feb 2014
EUR/CHF in fresh lows sub-1.2230
FXStreet (Edinburgh) - The Swiss franc is gaining ground at the beginning of the week following the recent vote regarding immigration quotas in the Alpine country, dragging EUR/CHF below 1.2230.
EUR/CHF consolidating between 1.2200 and 1.2250
After climbing to the vicinity of 1.2400 the figure in early January, the cross sparked a correction lower that violated the 1.2200 key support last week, although regaining some ground in the subsequent sessions. The recent Swiss vote imposing immigration quotas is threatening the relation between Switzerland and the EU and is supporting the current CHF strength. “The impact on EURCHF is likely negative at the open in Asia on expectations the SNB will need to tighten earlier than expected… With a higher inflationary potential over the medium term, the task of the SNB is more difficult. If it is forced to tighten earlier than the ECB, the EURCHF floor loses credibility”, assessed Sebastien Galy, Strategist at Societe Generale.
EUR/CHF key levels
At the moment the cross is losing 0.09% at 1.2226 with the immediate support at 1.2205 (low Feb.5) followed by 1.2188 (low Feb.4) and then 1.2185 (2014 low Feb.3). On the upside, a surpass of 1.2245 (high Feb.6/7) would aim for 1.2246 (high Jan.31) and then 1.2255 (high Jan.30).
EUR/CHF consolidating between 1.2200 and 1.2250
After climbing to the vicinity of 1.2400 the figure in early January, the cross sparked a correction lower that violated the 1.2200 key support last week, although regaining some ground in the subsequent sessions. The recent Swiss vote imposing immigration quotas is threatening the relation between Switzerland and the EU and is supporting the current CHF strength. “The impact on EURCHF is likely negative at the open in Asia on expectations the SNB will need to tighten earlier than expected… With a higher inflationary potential over the medium term, the task of the SNB is more difficult. If it is forced to tighten earlier than the ECB, the EURCHF floor loses credibility”, assessed Sebastien Galy, Strategist at Societe Generale.
EUR/CHF key levels
At the moment the cross is losing 0.09% at 1.2226 with the immediate support at 1.2205 (low Feb.5) followed by 1.2188 (low Feb.4) and then 1.2185 (2014 low Feb.3). On the upside, a surpass of 1.2245 (high Feb.6/7) would aim for 1.2246 (high Jan.31) and then 1.2255 (high Jan.30).