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EUR/CHF

  • #3,781
  • Mar 22, 2012 4:56am Mar 22, 2012 4:56am
People tend to forget that fundamentally speaking CHF is still pretty much overvalued against the Euro. So this floor will work not on the short term but on the long term. If they keep it for more than a year now, I expect the pair will go up slowly. And than they can take the floor out.
If the pair is trading above 1.30 who cares about the 1.20 floor anyway?
  • #3,782
  • Mar 22, 2012 5:14am Mar 22, 2012 5:14am
Quoting Tradertuga
People tend to forget that fundamentally speaking CHF is still pretty much overvalued against the Euro. So this floor will work not on the short term but on the long term. If they keep it for more than a year now, I expect the pair will go up slowly. And than they can take the floor out.
If the pair is trading above 1.30 who cares about the 1.20 floor anyway?
You really think that foundamentally chf is overvauled against eur?
Comeon, the market is never wrong, if it price 1.20 (it would price less without snb) is because the eur foundamentally is valued 1.20 (or less), the eur economy is shrinking and going to the hell month after month, from years, the more time pass the more the economical situation go worst, poor people become poorers, the ones who have a job loose it, in some eurozone the unemplyment rate is much higher than the average, totally worst than the swiss economy situation.

But we all know that foundamentally is not everything, even a multiyear trend (even if foundamentally correct) at one point will have to find a top/bottom, and from there make a correction.
So don't give up!
  • #3,783
  • Mar 22, 2012 5:24am Mar 22, 2012 5:24am
^^The Swiss economy is soo interdependet on the Euro zone, that they might just declare a peg.

I agree that the pair might been trading under 1.20 if the floor didn't exist on the first place, but the fact is that is not. And the SNB is just part of the market itself. So if it's trading above 1.205, it means that the market assumes that currently that's it's fair value.
  • #3,784
  • Mar 22, 2012 6:21am Mar 22, 2012 6:21am
From the fundamental point of view (besides the technical that is also at least important) the situation I think is not that complicated, you just have to read the last SNB statement, only three lines as follows:

DJ Swiss SNB: Sees Downside Risk For Price Stability If CHF Won't Weaken
DJ SNB Expects 2012 Inflation At -0.6%
DJ SNB's Previous Forecast For 2012 Inflation Was -0.3%

I think this is not a play with the words rather think this is serious because if you consider what would happen as a result of removing the peg (-1000 or even more) than SNB could calculate with the significant deterioration of the current deflation situation. Even now with the peg they have worsened their deflation expectations in the statement.

This of course does not mean the raise of the peg but when they have a new president and have the political support (that they have ATM), they might introduce other measures to weaken the CHF (like negative interest), because that is exactly the core of their job (price stability) and almost nothing else.

Of course if there's CPI around 2% YoY then we have to reconsider the situation, but we are very far away from that.
  • #3,785
  • Mar 22, 2012 6:57am Mar 22, 2012 6:57am
Quoting tunera
You really think that foundamentally chf is overvauled against eur?
Comeon, the market is never wrong, if it price 1.20 (it would price less without snb) is because the eur foundamentally is valued 1.20 (or less), the eur economy is shrinking and going to the hell month after month
you don't think that is overvalued? you are right about the eur problems but what about the other pairs? GBP/CHF drop 9.000 pips and USD/CHF drop 4.000 pips in just 3 years. this can't be just fundamental. and the downfall stopped only because of the peg. remember that massive eur sell-off in the end of last year. i'm pretty sure that if it wasn't for the floor now this pair would trade bellow 1,00
  • #3,786
  • Mar 22, 2012 7:13am Mar 22, 2012 7:13am
Quoting KillerWhale
My opinion about a trader who faces a bankruptcy or a margin call is doomed to lose his money anyway by just not following all the warnings or not applying any money management.
I know a lot of other traders would handle this with "care" and "compassion", sorry I don't.
i guess it's more about understanding his situation rather then compassion. maybe the rules and the money management tell us that we have to close a losing trade at some point and it's a sure thing that is best to respect them. but you know very well that this pair has a special situation. it's hard to ignore a CB who is sitting behind you and is determined to protect a certain level. i don't know what i would have done in his situation at that point but now i'd definitely leave my position open and do some scalping in the meantime... anyway i don't want to get offtopic so i'll end it here. only time will tell us what was the right choice
  • #3,787
  • Mar 22, 2012 8:07am Mar 22, 2012 8:07am
Quoting Adi_M
you don't think that is overvalued? you are right about the eur problems but what about the other pairs? GBP/CHF drop 9.000 pips and USD/CHF drop 4.000 pips in just 3 years. this can't be just fundamental. and the downfall stopped only because of the peg. remember that massive eur sell-off in the end of last year. i'm pretty sure that if it wasn't for the floor now this pair would trade bellow 1,00
If we talk about overvalued currency, it is good to consider what you get for your money in real life. For example in the machinery industry for 20% lower pirce you can get the same top quality product or service in neighbouring Germany compared to Swiss levels. Or in the tourism sector in Austria for at least 20% lower price you get the same or sometimes even better service than in Switzerland.

Ok, there's the safe haven issue, but is the CHF safe haven anymore with all this ciient disclosure to the IRS and EU from the private banks, and besides you can be a proud owner of CHF at 1,00 level compared to the EUR but then all you got is a currency of a crippled uncompetitive economy. There can be market spikes and failures but sooner or later real life kicks in.
So to cut the long story sort, I think CHf is way too overvalued.
  • #3,788
  • Mar 22, 2012 10:09am Mar 22, 2012 10:09am
SNB'S MOSER: SNB commitment on franc cap applies 'day and night'.

SNB'S MOSER: SNB using 'zero-tolerance principle' on franc cap and is 'operatively always ready' to buy currencies.

SNB officials on the wires - they're making it crystal clear that 1.2000 will hold in $EURCHF and they're ready to intervene at any momen
  • #3,789
  • Mar 22, 2012 10:23am Mar 22, 2012 10:23am
Quoting coolkaps4u
SNB officials on the wires - they're making it crystal clear that 1.2000 will hold in $EURCHF and they're ready to intervene at any momen

1.2000 will hold in $EURCHF and they're ready to intervene at any moment
they're ready to intervene at any moment
intervene at any moment
intervene
intervene

http://webtrax.hu/myfacewhen/faces/l...s/fuck-yea.jpg
  • #3,790
  • Mar 22, 2012 10:49am Mar 22, 2012 10:49am
Yeah!!! Snb show us what you can do
  • #3,791
  • Mar 22, 2012 10:54am Mar 22, 2012 10:54am
please go to 1.24 3 times after I've scalped my money back.
  • #3,792
  • Mar 22, 2012 7:19pm Mar 22, 2012 7:19pm
Quoting Tjay
please go to 1.24 3 times after I've scalped my money back.
Thank you...all of us here is looking forward to that numbers too.
  • #3,793
  • Mar 23, 2012 1:31am Mar 23, 2012 1:31am
I would acutally like it to go to 1,2020 first.... We need some firestarter, some of the guys that shorted 1,213 have to cover somewhere.
Fail better.
  • #3,794
  • Mar 23, 2012 2:06am Mar 23, 2012 2:06am
Quoting LarryDarrell
I would acutally like it to go to 1,2020 first.... We need some firestarter, some of the guys that shorted 1,213 have to cover somewhere.
Yes true...
  • #3,795
  • Mar 23, 2012 2:13am Mar 23, 2012 2:13am
Quoting LarryDarrell
I would acutally like it to go to 1,2020 first.... We need some firestarter, some of the guys that shorted 1,213 have to cover somewhere.
i charged my account today to save myself from a margin call, im now okay to 1.19000, so yes, now it can go lower if it want...
  • #3,796
  • Mar 23, 2012 4:13am Mar 23, 2012 4:13am
hi

what is better use scalping systems for its pair our long term?
  • #3,797
  • Mar 23, 2012 5:00am Mar 23, 2012 5:00am
Quoting zu88
hi

what is better use scalping systems for its pair our long term?
sorry i dont get it. ur question is, which trading style is better at the moment on this pair, scalping or long-term?
if yes, i advise u to choose the second. go long around 1,2 as down as u can and wait. anyway, the style u choose is depends on ur habit and on ur money, not on the pair i think. if u r a daytrader, scalping is better than if u r an investor.
  • #3,798
  • Mar 23, 2012 8:54am Mar 23, 2012 8:54am
Finally it break low...SNB peg again be tested...
  • #3,799
  • Mar 23, 2012 9:15am Mar 23, 2012 9:15am
I just went long on this pair at 1.2050.
so expect this pair to break 1.20 level soon.
  • #3,800
  • Mar 23, 2012 9:19am Mar 23, 2012 9:19am
Quoting Fx-gtg
I just went long on this pair at 1.2050.
so expect this pair to break 1.20 level soon.
i dont think it will. the lowest point wont be under 1,2020 imo.
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