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EUR/CHF

  • #3,421
  • Mar 8, 2012 12:06am Mar 8, 2012 12:06am
Quoting tunera
As per trigger I think we have to look at the USD index, that is the key
Would you like to expand on this?
  • #3,422
  • Mar 8, 2012 12:27am Mar 8, 2012 12:27am
No maybe I'm very wrong, but you can bet that somehow the chf the eur and the USD index are all correlated. So, if we want the big move, it can come when an event shock one of these index. The chf is overbought and ready to fall (good for our eurchf longs), the Usdx is in bull flag mode, you can be sure that will be back at his highs soon, at this point the key is the eur, if it will be able to not drop like a rock (like, if Greece deals don't go at the worst, no default etc) at that point the usdx will be the one who may fuel the move (usdx up, chf down, eur stable = eurchf rocket!).
Of course keeping all this in mind to me would be more profitable to long the usdx or usdchf, but ok with eurchf we have the 1.2000 thing that somehow erase big part of the risks involved in a trade (unless the pair break the floor, but I think is unlikely. Ok in past it happened that a floor has been broken, but the dynamics was totally differents)
  • #3,423
  • Mar 8, 2012 1:27am Mar 8, 2012 1:27am
I kind of like this chart, even though with this pair charts have no meaning:

Attached Image (click to enlarge)
Click to Enlarge Name: EURCHF4HOUR.png Size: 79 KB


Normally one could get excited.
  • #3,424
  • Mar 8, 2012 1:35am Mar 8, 2012 1:35am
Quoting tunera
No maybe I'm very wrong, but you can bet that somehow the chf the eur and the USD index are all correlated. [...]
I am not paying much attention to other pairs when trading EUR/CHF (or any other pair).

Quoting tunera
The chf is overbought and ready to fall (good for our eurchf longs), [...]
In my opinion EUR/CHF is in an extremely bearish situation - it is still in a downtrend which started several years ago. This downtrend had regular pauses when the interventions came, e.g. at 1.6, then at 1.4 and now at 1.2. I now expect to happen what always happened the last times - a big drop to the next support level. This is about 1.0 which is a whopping 2000 pips down from the current price of 1.2050.

I find it quite easy to guess what will happen next: a negative news on EUR, most likely from greece will send the EUR/CHF down to parity. The only question is when this will happen and whether EUR/CHF will have a small hiccup before this (maybe a move of 100 or some more pips up).

As I am not a swing trader, I would be looking for scalping the intraday action of the drop. And of course, I am just talking about a high probability. This does not mean 100% certain.
  • #3,425
  • Mar 8, 2012 1:51am Mar 8, 2012 1:51am
So we're going to "buy buy the snb will raise the floor" to "the snb will not raise the floor but pair will appreciate with time" to "this will remain in the little range forever" to "the floor will break and it will fall to the lows".
Of course All the scenario make sense, interesting to see this shift of perceptions
  • #3,426
  • Mar 8, 2012 1:54am Mar 8, 2012 1:54am
Quoting TraderJF
I wonder why most of the people here are expecting a move up. When looking at EUR/CHF's history, it broke down most of the time after an intervention. I remember breakdown moves from 1.6000 and 1.4000 in the recent years. Additionally, a breakdown would be a very profitable move with its technical target being the recent swing low at 1.0000. That's 2.000 pips down from here. Quite an impressive profit target, eh?

By the way, George Soros made a decent amount of his fortune by betting against the GBP after an intervention of the Bank of England....
you know you can't compare George Soros situation with this one. it's much easier to fight with a CB that wants to appreciate their currency. and 1,2000 is a level that can be defended. 1,4000 was just too big for them. anyway you may be right and the floor could be broken if the EZ situation get worse, but is very unlikely to be broken at the very first attempt
  • #3,427
  • Mar 8, 2012 2:16am Mar 8, 2012 2:16am
CPI 0,3 MoM (-0,9 YoY)...just forget it....
  • #3,428
  • Mar 8, 2012 2:20am Mar 8, 2012 2:20am
Quoting Mosq
CPI 0,3 MoM (-0,9 YoY)...just forget it....
Here we go again...
  • #3,429
  • Mar 8, 2012 2:21am Mar 8, 2012 2:21am
Quote

In my opinion EUR/CHF is in an extremely bearish situation - it is still in a downtrend which started several years ago. This downtrend had regular pauses when the interventions came, e.g. at 1.6, then at 1.4 and now at 1.2. I now expect to happen what always happened the last times - a big drop to the next support level. This is about 1.0 which is a whopping 2000 pips down from the current price of 1.2050.

When the EUR/CHF started it's multi year downtrend, probably there were some traders that sold then, and are still using the profits to finance their trades today. Just as they then wanted to pick a top, I myself am looking to pick a bottom, and some here believe in the resolve of the SNB to defend that floor/bottom.

The reasons for intervention have all been well documented, and sooner or later a currency can only be so strong (or weak) that a central bank has to intervene. It is also a matter of national security which is (in the case of Switzerland) currently supported through the statements from side of the government.

Fair value (often enough documented) of the pair is 1.4000, not parity.
  • #3,430
  • Mar 8, 2012 2:22am Mar 8, 2012 2:22am
"Swiss inflation data in circulation, with CPI down 0.9% on the year against the calls for a full percentage point loss. On the month prices were 0.3% higher but inflation concerns remain off the radar for the moment. The SNB's Jordan is set to talk in Bern on the 2011 SNB results after 09:15 GMT but there is little to note expect the central bank returned to profit (CHF 13.5Bln) after a dismal 2010. News which should ease some of the political pressure on the interim Swiss National Bank head.

EUR/CHF trades off its 1.2048 multi-day lows, with the cross still comfortable in the 1.2050s. 1.2025 & 1.2000 option barriers and yards of stops into the 1.19s but rebound potential at such levels will remain elevated given the threat of intervention. Locals still tout the viability and credibility of the SNB floor but offers from the 1.2060s trail into the 1.21s to keep the cross topside equally as limited.

Elsewhere, USD/CHF trades off its 0.9202 Wednesday highs, with support into the lower-0.91s looking to limit the initial pullback and keep stops into the upper-0.90s intact for the moment. With the Euro cross hemmed into the 1.2050s the Dollar pair remains at the mercy of wider US unit movements and locals are keen to eye EUR/USD for signs of fresh volatility."
  • #3,431
  • Mar 8, 2012 2:58am Mar 8, 2012 2:58am
Quoting Cuso
[...]
It is also a matter of national security which is (in the case of Switzerland) currently supported through the statements from side of the government.
The market is stronger than any entity in this world. Neither the SNB nor the Swiss government can prevent EUR/CHF from dropping if the market continues to exercise downward pressure. Currently there is heavy downward pressure which leads to the EUR/CHF being nailed down to the floor at 1.2050. The SNB is obviously buying at this level while the market is selling anything above it. Sooner or later the SNB will run out of capital if nothing special helps the EUR.

Quoting Cuso
Fair value (often enough documented) of the pair is 1.4000, not parity.
Noone except the market knows the the fair price of this pair. Politicians are almost guaranteed to be wrong in this respect.

I find it not too unlikely that EUR/CHF might even drop to 0.8 before pulling back to 1.0. And then we could play the same game again as we did at 1.6, 1.4 and 1.2. But that is just a guess.

Its ok to try to pick bottoms and tops but one has to be especially cautious when doing that. Good luck!
  • #3,432
  • Mar 8, 2012 3:18am Mar 8, 2012 3:18am
Quoting TraderJF
...

Noone except the market knows the the fair price of this pair. Politicians are almost guaranteed to be wrong in this respect.
Every goverment has almost unlimited bullets at their disposal such as negative interest rates or capital curbs to mention a couple. The big questions is how resolute are they, and much danger is at hand through currency appreciation.

In one point I agree with you, Switzerland is not going to collapse totally if the pair goes under 1.2000, just some parts of their economy will be in real and tangible danger. How much is tourism or exporting a part of their GDP? I think enough that the politictians are worried, and willing to act.

The small position that I have in this pair is speculative and won't break me, I'm just trading this one on my convictions. Good luck yourself!
  • #3,433
  • Mar 8, 2012 3:37am Mar 8, 2012 3:37am
Just for informational purposes.

In case nobody has heard this figure, the SNB spent 17.8B CHF in 2011 for FX intervention. Draw your own conclusions.
  • #3,434
  • Mar 8, 2012 3:51am Mar 8, 2012 3:51am
Quoting Cuso
[...] the SNB spent 17.8B CHF in 2011 for FX intervention. [...]
Damn - I only grabbed a fraction of this when I scalped it all the way down
  • #3,435
  • Mar 8, 2012 4:20am Mar 8, 2012 4:20am
I grabbed a big piece on the way up from 1.0530
  • #3,436
  • Mar 8, 2012 4:28am Mar 8, 2012 4:28am
Quoting Cuso
I grabbed a big piece on the way up from 1.0530
nice cut, buddy. i hope i'll lucky as u one day if they intervene. i already called, so i only have to do now is patiently wait. as i do since december. (...damn...)
  • #3,437
  • Mar 8, 2012 4:28am Mar 8, 2012 4:28am
Quoting Cuso
I grabbed a big piece on the way up from 1.0530
A big piece of the 17.8B CHF?
  • #3,438
  • Mar 8, 2012 4:42am Mar 8, 2012 4:42am
Quoting Cuso
Just for informational purposes.

In case nobody has heard this figure, the SNB spent 17.8B CHF in 2011 for FX intervention. Draw your own conclusions.

I see this:


ZURICH (Dow Jones)--The Swiss National Bank Thursday said it posted a consolidated profit of CHF13.5 billion ($14.8 billion) last year due to higher valuations of its foreign-currency and gold holdings.

The Swiss central bank's full-year profit compares with a loss of CHF19.2 billion in 2010, and was revised upwards from a provisional CHF13.0 billion reported in January.

"Consolidated foreign-currency positions contributed CHF7.7 billion to the profit, of which interest income of CHF5.5 billion and the CHF3.7 billion price gain on interest-bearing paper were the most important components," the SNB said in a statement.

The central bank, which set a cap of CHF1.20 per euro in September to check its currency's sharp appreciation, said "exchange-rate effects were minimal, with losses of only CHF0.1 billion."
  • #3,439
  • Mar 8, 2012 5:08am Mar 8, 2012 5:08am
Quoting Cuso
I guess we'll know something at the latest about 6PM GMT tomorrow:

Attachment

Nice wedge forming, which could mean a breakout is coming. In which direction is written in the stars.
Any news on the wedge? (breakout...backtest...or nothing)
  • #3,440
  • Mar 8, 2012 5:26am Mar 8, 2012 5:26am
Quoting Cuso
Every goverment has almost unlimited bullets at their disposal such as negative interest rates or capital curbs to mention a couple. The big questions is how resolute are they, and much danger is at hand through currency appreciation.

In one point I agree with you, Switzerland is not going to collapse totally if the pair goes under 1.2000, just some parts of their economy will be in real and tangible danger. How much is tourism or exporting a part of their GDP? I think enough that the politictians are worried, and willing to act.

The small position...
You are mising the most important part of their economy that is in danger: The financial services and the entire banking sector, That is why the SNB is involved... not because of the tourism.
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