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Joined Feb 2012
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Status: Don't trend on me.
|347 Posts
My take...
1). The closer EUR/CHF gets to the said 1.2000 floor (it's not a peg...thats different) the less the SNB will have to act....at least in theory . How many here would add to their long positions at 1.2020?
2). If the floor is broken, so many stops would be triggered that the SNB would have to spend incalculable funds just to counteract the squeeze, and would have to bust their butts just to get the pair back to the 1.2000 floor.
3). The SNB is playing a very dangerous game, as they have left very little room between the existing rate and the floor. If we get a EUR shock (i.e. Greece blows up or CDS are activated etc..) the SNB will be caught between a rock and a hard place...with no room to wiggle.
4). The floor will not be raised. The SNB will however defend the 1.2000, because if they do or can, the EUR/CHF has the best chance to organically go higher, which will negate the need to defend a higher floor, which just would cost them even more.
5). The shorts are just Hedges and normal inflows, because thats the way things work.
My first post here, so go ahead and tear me apart...
28-febr.-2012
1150 GMT [Dow Jones] Risk/reward favors long EUR/CHF into elevated event risk over the next couple of days RBC says. The bank notes SNB Vice Chairman and acting President Jordan speak later today and while there is no guidance on the subject, EUR/CHF risk is to the upside should Jordan reiterate SNB's commitment to the floor and willingness to "do more" if necessary. Two Swiss key monthly indicators are due overnight: KOF is expected to improve moderately to -0.10 from -0.17 although still well below long term average, while February CPI is expected to sink deeper into negative territory at -0.7% on the year from -0.4%. EUR/CHF at 1.2050.
28-febr.-2012
1150 GMT [Dow Jones] Risk/reward favors long EUR/CHF into elevated event risk over the next couple of days RBC says. The bank notes SNB Vice Chairman and acting President Jordan speak later today and while there is no guidance on the subject, EUR/CHF risk is to the upside should Jordan reiterate SNB's commitment to the floor and willingness to "do more" if necessary. Two Swiss key monthly indicators are due overnight: KOF is expected to improve moderately to -0.10 from -0.17 although still well below long term average, while February...
Ignored
I personally trust SNB, however from a technical stand point too the buy-side is good, with a technical target of 1.32 to 1.40. Remember that nothing last forever, even the strongest trend (downtrend in this case).
Like, take usdcad for example, the correction was huge (4000 pips).
And not all banks think the same, look at mig they are for the bearish scenario. What is slightly worrying is that MIG is actually from switzerland, so maybe they have better informations about their country's economy and various political situations related to what SNB or the CHF may do. On the other side nobody know the futures so who cares about what MIG say.
I expect a strong recovery in the following months, not necessary because of SNB intervention (not like the last one that made 1000pips in one day), a slower recovery but anyway strong, and ok if snb decide to raise the floor it would be a good thing for the buyers.
Am very excited to see what will happen in the next future!
1). The closer EUR/CHF gets to the said 1.2000 floor (it's not a peg...thats different) the less the SNB will have to act....at least in theory . How many here would add to their long positions at 1.2020?
2). If the floor is broken, so many stops would be triggered that the SNB would have to spend incalculable funds just to counteract the squeeze, and would have to bust their butts just to get the pair back to the 1.2000 floor.
3). The SNB is playing a very dangerous game, as they have left very little room between the existing...
Ignored
You had me at hello! Nice one, I totally agree with you.
