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EUR/CHF

  • #2,701
  • Jan 31, 2012 11:17am Jan 31, 2012 11:17am
WOW!! i have never seen this before :'' $EURCHF client positioning shows # of traders long outnumber those short by MASSIVE 27.5 to 1''. i guess this is an all-time record
  • #2,702
  • Jan 31, 2012 11:20am Jan 31, 2012 11:20am
Quoting tobias24
where do you have this info from?
This is the Credit souise

http://www.forexlive.com/blog/2012/0...age-situation/

UBS lost money

http://www.forexlive.com/blog/2011/0...ated-at-2-bln/

And there was a lot of commnet from UBS to buy eur/chf in the last 4 months

Barcap was here at the forexfactory

"From Dow Jones: "Barclays Capital is looking to buy EUR/CHF weakness towards 1.2020, and against the SNB's 1.20 floor. Topside, a break above 1.2150 would encourage the bank to add to its fresh longs, looking for a move to 1.22 and then 1.2245. BarCap also notes that a higher close for the cross late Tuesday, after settling around 1.2053 Monday, would post a bullish divergence warning. EUR/CHF is now at 1.2054."

  • #2,703
  • Jan 31, 2012 11:25am Jan 31, 2012 11:25am
When we were at 1.21 and 1.2080 levels we saw quick long spikes. At these levels close to peg nothing.
  • #2,704
  • Jan 31, 2012 11:27am Jan 31, 2012 11:27am
thanks simon!
  • #2,705
  • Jan 31, 2012 11:32am Jan 31, 2012 11:32am
I think a possible thing can be like this:

1) the SNB is actually not buying nothing, everybody know about this 1.20 floor and as soon as pair go near it, new traders, banks, hedgefunds etc. buy, buy buy buy, making the floor valid even without the SNB buying nothing.

what will happen maybe, once there will be no more buyers, the pair will inevitably drop, making a huge long squeeze (many buyers if not most of them will have margin calls), price may drop 200-400-1000 pips!
Once the pair will be down, with most buyers stopped out, the SNB will at that point buy (very cheaply!) the eur-chf, and let it go to the famous 1.32.

Of course, SNB said that they don't tolerate the pair below 1.20 anymore, but this doesn't mean that it can't go to let's say 1.10 for a few hours.
What they really looks for is the long-term value of the price, so a fast long-squeeze will not affect their credibility at all.

In other words, be careful about this game, central banks are not stupids and surprises may happen!

My 2 fantasious cents
  • #2,706
  • Jan 31, 2012 11:35am Jan 31, 2012 11:35am
Quoting tunera
I think a possible thing can be like this:

1) the SNB is actually not buying nothing, everybody know about this 1.20 floor and as soon as pair go near it, new traders, banks, hedgefunds etc. buy, buy buy buy, making the floor valid even without the SNB buying nothing.

what will happen maybe, once there will be no more buyers, the pair will inevitably drop, making a huge long squeeze (many buyers if not most of them will have margin calls), price may drop 200-400-1000 pips!
Once the pair will be down, with most buyers stopped out, the SNB...
i like that view ..
  • #2,707
  • Jan 31, 2012 11:43am Jan 31, 2012 11:43am
Latest view on euro swiss as trader struggle to test snb at 1.2 level
Attached Image (click to enlarge)
Click to Enlarge Name: CHF3.JPG Size: 93 KB
Bismillah
  • #2,708
  • Jan 31, 2012 11:45am Jan 31, 2012 11:45am
I do not know if retail traders can sue SNB for giving misleading information or not . The SNB has given a confirmation that it would defend the 1.20 peg , and if the pair goes under the 1.20 , retail traders will sue the SNB for giving them a confirmation and a misleading misleading information ( when they said they would defend the 1.20 )

I think the SNB may announce in the coming time a new peg at 1.25s , so it make short sellers lose their huge money .

Lets wait and see what happen .
  • #2,709
  • Jan 31, 2012 11:51am Jan 31, 2012 11:51am
Quoting ksmartboy
I do not know if retail traders can sue SNB for giving misleading information or not . The SNB has given a confirmation that it would defend the 1.20 peg , and if the pair goes under the 1.20 , retail traders will sue the SNB for giving them a confirmation and a misleading misleading information ( when they said they would defend the 1.20 )

I think the SNB may announce in the coming time a new peg at 1.25s , so it make short sellers lose their huge money .

Lets wait and see what happen .
interessting point. banks could sue them too? dunno.
  • #2,710
  • Jan 31, 2012 12:15pm Jan 31, 2012 12:15pm
New minimum, and short covering after EU session close. Like yesterday
  • #2,711
  • Jan 31, 2012 12:16pm Jan 31, 2012 12:16pm
Quoting tobias24
interessting point. banks could sue them too? dunno.
Because of what? Nobody will sue the SNB. That's total - sorry - bullshit.
  • #2,712
  • Jan 31, 2012 12:23pm Jan 31, 2012 12:23pm
Quoting Simon73
New minimum, and short covering after EU session close. Like yesterday

at the same time ... incredible
There is only one right price.... what the customer is willing to pay !
  • #2,713
  • Jan 31, 2012 12:34pm Jan 31, 2012 12:34pm
Quoting dennis_ger
Because of what? Nobody will sue the SNB. That's total - sorry - bullshit.
as a bank I would try to sue them for giving misleading information. they cant do what they want. if it breaks, they have to announce they set the peg to e.g. 1.10
  • #2,714
  • Jan 31, 2012 12:46pm Jan 31, 2012 12:46pm
Quoting tobias24
as a bank I would try to sue them for giving misleading information. they cant do what they want. if it breaks, they have to announce they set the peg to e.g. 1.10
Wrong. They can do what they want. And they will.

Their only problem is credibility. Credibility is one of the main assets of each central bank. The easiest way of conducting monetary policy is to bring the market to the point at which it does what you (as a central bank) want. So you don't have to do it yourself. But that doesn't work if you don't have any credibility.
  • #2,715
  • Jan 31, 2012 1:00pm Jan 31, 2012 1:00pm
Quoting dennis_ger
Wrong. They can do what they want. And they will.

Their only problem is credibility. Credibility is one of the main assets of each central bank. The easiest way of conducting monetary policy is to bring the market to the point at which it does what you (as a central bank) want. So you don't have to do it yourself. But that doesn't work if you don't have any credibility.
Strongly agree.
Plus, why would the SNB make any unexpected moves now, when they are under investigation for insider trading? I think a drop or raise of the peg, muscle flexing to scare the sellers or conspiration to kill the retailers are excluded. They will probably "print" as much as it takes and stay in the bid just above 1.2 until the shorts get bored to death. And use the euros to buy some EU bonds, help calm things down in the neighborhood.
Buy this now as an investment and don't sweat too much. And watch your stops, your broker may be your biggest enemy.
  • #2,716
  • Jan 31, 2012 3:17pm Jan 31, 2012 3:17pm
http://www.dailyfx.com/forex/technic...iss_franc.html
  • #2,717
  • Jan 31, 2012 3:31pm Jan 31, 2012 3:31pm
Quoting Doc'
http://www.dailyfx.com/forex/technic...iss_franc.html
Thanks
  • #2,718
  • Jan 31, 2012 4:55pm Jan 31, 2012 4:55pm
Quoting Doc'
http://www.dailyfx.com/forex/technic...iss_franc.html
Two main problems with this analysis:

1) The writer is placing too much of an emphasis on retail traders. Retail traders represent a tiny percentage of the market and are pretty much insignificant. This can be demonstrated by the fact that EUR/CHF declined considerably over the past 2-3 weeks whereas the number of net long retailers increased significantly during that time.

2) "Over 96 percent of retail traders in our sample are currently long, and a Swiss National Bank intervention would almost certainly bail out many speculators holding unprofitable positions. That may be a difficult pill to swallow for a central bank embroiled in its own minor controversy over forex speculation."
It's actually the other way around. If I was the SNB I would rather the traders who were long be rewarded than the speculators who were short. The reason for this is the simple fact that if the short speculators were rewarded, they will be provided with more ammunition to go against the SNB should the peg be re-established or raised. For example, if the SNB lets EURCHF go below 1.20, the short speculators will collect their profits and will be ready to challenge the SNB again should when the peg is defended or raised. However, if the SNB intervenes before the peg is broken, then the short speculators will take a big hit and it will be much harder for them to challenge the SNB again.
  • #2,719
  • Jan 31, 2012 5:09pm Jan 31, 2012 5:09pm
Quoting stockey
Two main problems with this analysis:
if the SNB intervenes before the peg is broken, then the short speculators will take a big hit and it will be much harder for them to challenge the SNB again.
That makes sense but the SNB knows that retailers are profit takers, and as soon as they start taking profits it will become an avalanche of sell orders, unless the floor is significantly raised and retailers decide to stay in the trade... but to be honest I don't know if the SNB is all that concerned about retailers since they account for such a small percentage of the mkt.
  • #2,720
  • Jan 31, 2012 5:14pm Jan 31, 2012 5:14pm
Better still: why doesn't the SNB reward the hard working retailers with the money of the short speculators. Tha bad guys are punished the good guys are rewarded and the SNB gets a new peg... a big one. That was sharp.
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