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EUR/CHF

  • #8,941
  • Aug 7, 2012 1:53am Aug 7, 2012 1:53am
It happens when market buy orders outnumber market sellers. Someone bought big without a seller on the other side (during a known time of low liquidity) and price had to move up!
  • #8,942
  • Aug 7, 2012 1:58am Aug 7, 2012 1:58am
Quoting EmeraldEyes
It happens when market buy orders outnumber market sellers. Someone bought big without a seller on the other side (during a known time of low liquidity) and price had to move up!
It was a very quick spike thats for sure.

Foreign Currency Reserves (Jul) up to 406.5 billion from 364.9 billion
  • #8,943
  • Aug 7, 2012 2:07am Aug 7, 2012 2:07am
Quoting brinks
It was a very quick spike thats for sure.

Foreign Currency Reserves (Jul) up to 406.5 billion from 364.9 billion

yeah, I had some TPs between 1.2016 and 1.202 ; next time I'll place some above 1.205...
  • #8,944
  • Edited 2:19am Aug 7, 2012 2:09am | Edited 2:19am
Quoting rcrist
yeah, I had some TPs between 1.2016 and 1.202 ; next time I'll place some above 1.205...

I didnt have any take profits on and probably wouldnt of been allowed to close them manually on a spike that quick.

CPI month on month and year on year a little better than expected
  • #8,945
  • Aug 7, 2012 2:19am Aug 7, 2012 2:19am
I have small TPs on 1.2018, 20, 25, 30, 35.

Got a little profit from this spike.

But I'm more worried than happy - what if a reverse spike is seen??? What if SNB has no time to act when some sellers try to test the floor and sell stops trigger in just a few seconds? Can a similar 1min spike downwards happen before SNB intervenes? We will all be dead then!

What do you guys think?
  • #8,946
  • Aug 7, 2012 2:21am Aug 7, 2012 2:21am
Quoting alaneth
I have small TPs on 1.2018, 20, 25, 30, 35.

Got a little profit from this spike.

But I'm more worried than happy - what if a reverse spike is seen??? What if SNB has no time to act when some sellers try to test the floor and sell stops trigger in just a few seconds? Can a similar 1min spike downwards happen before SNB intervenes? We will all be dead then!

What do you guys think?
I dont think it will happen with the amount of reported bids of the SNB down at the 1.20 level
  • #8,947
  • Aug 7, 2012 2:38am Aug 7, 2012 2:38am
Quoting alaneth
I have small TPs on 1.2018, 20, 25, 30, 35.

Got a little profit from this spike.

But I'm more worried than happy - what if a reverse spike is seen??? What if SNB has no time to act when some sellers try to test the floor and sell stops trigger in just a few seconds? Can a similar 1min spike downwards happen before SNB intervenes? We will all be dead then!

What do you guys think?
Happened on April 5th. Price slipped by SNB's bids (its all OTC btw). The SNB has dealing desks trading on their behalf, able to defend 1.20. If a spike downwards happens, the SNB loses credibility.. and the bulls' stops that are helping to defend the peg.
  • #8,948
  • Aug 7, 2012 2:45am Aug 7, 2012 2:45am
Quoting EmeraldEyes
Happened on April 5th. Price slipped by SNB's bids (its all OTC btw). The SNB has dealing desks trading on their behalf, able to defend 1.20. If a spike downwards happens, the SNB loses credibility.. and the bulls' stops that are helping to defend the peg.
I think he meant a 70-100 pip spike down
  • #8,949
  • Aug 7, 2012 2:52am Aug 7, 2012 2:52am
The same thing happened on january. EURCHF went up 40 pips in a minute

http://www.trading-point.com/forex-n...ervention-6213

The Wall Street Journal reported that it obtained information from sources that the reason behind the Swiss franc plunging 40 pips within a minute against the euro in the US trading session today was because of an error by a trader.

EURCHF spiked to 1.2128 at 9:38 am New York time from 1.2094 before immediately dropping back down to 1.2091.

Many questioned whether it was the Swiss National Bank that had intervened, especially because the euro has been hovering so close to the 1.20 franc peg against the euro. But it was soon reported that it was mere human error and traders in London reported that an incorrect price had been entered into a dealing system, triggering the spike.

“The market was confused about the bid, which may be due to a system error,” says Quaesta Capital trader Damian Zihlmann in Zurich. The euro backed off its high as traders realized the buying interest was not from the SNB and would not be sustained, he added.

Traders have been on alert all this month for any sign of a possible SNB intervention since a broadly weaker euro has left it hover so close to the tolerance limit that was set in September last year, in an effort to protect Swiss exporters.

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  • #8,950
  • Aug 7, 2012 3:14am Aug 7, 2012 3:14am
Quoting brinks
I think he meant a 70-100 pip spike down
Oh, no the SNB can't let that happen. They've pledged w/ an "unlimited" amount of Francs to uphold it with dealing desks around the world prepared to buy Eur for Chf at (almost ) all times.

Here's a good article about when the floor was breached the first time: http://www.businessweek.com/news/201...r-cap-breaches
  • #8,951
  • Aug 7, 2012 3:37am Aug 7, 2012 3:37am
Quoting EmeraldEyes
Oh, no the SNB can't let that happen. They've pledged w/ an "unlimited" amount of Francs to uphold it with dealing desks around the world prepared to buy Eur for Chf at (almost ) all times.

Here's a good article about when the floor was breached the first time: http://www.businessweek.com/news/201...r-cap-breaches

Thank yes as draghi knows credibility is everything the SNB can't let speculative break the floor
  • #8,952
  • Aug 7, 2012 3:45am Aug 7, 2012 3:45am
Quoting brinks
Thank yes as draghi knows credibility is everything the SNB can't let speculative break the floor
A reason why the SNB mentions the possibility of a higher peg. Specs hear that and buy, helping them out.
  • #8,953
  • Aug 7, 2012 4:39am Aug 7, 2012 4:39am
Before becoming too optimistic about EUR/CHF, you might consider:
a) CHF has lost against all other currencies YoY
b) 50% of Swiss exports are not going into EUR area. Therefore CHF has in average devaluated by 10% YoY for Swiss exports
c) SNB bought some 41billion CHF in July Forex. At the moment this is going down week by week (12.1, 9.5, 6.4b), so at the moment it looks good for SNB that they may reduce their interventions or even reduce their Forex reserves
d) However Grexit and German court decisions are looming.
e) Next year there will be elections in Germany and Italy
f) Inflation is non existing now, but you might have a glance what happened in 1978-1981 after pegging or generally the effects of increasing liquidity on inflation in Switzerland

So possibly the SNB is working on a less strict intervention policy in order to avoid the obvious risk: massive foreign currency reserves and then inflation going up.

For German readers:
http://de.global-rates.com/wirtschaf...i/schweiz.aspx

http://www.google.nl/url?sa=t&rct=j&...8hKVIg&cad=rja
  • #8,954
  • Aug 7, 2012 12:06pm Aug 7, 2012 12:06pm
Quoting didi_doedel
Before becoming too optimistic about EUR/CHF, you might consider:
Thanks for your input, but for me, longing this pair is my one hope since Sept 2011. My opinion...

a) CHF has lost against all other currencies YoY - major currencies yes. Jordan mentioned it last mid-Jun. He's happy abt it - but still insignificant to impact EURCHF.

b) 50% of Swiss exports are not going into EUR area. Therefore CHF has in average devaluated by 10% YoY for Swiss exports - Heard abt this 50% somewhere, but CHF is still way overvalued as many sources quote. Zurich (Switzerland) is still the most expensive city (country) in the world - UBS 2012 price & earnings survey.

c) SNB bought some 41billion CHF in July Forex. At the moment this is going down week by week (12.1, 9.5, 6.4b), so at the moment it looks good for SNB that they may reduce their interventions or even reduce their Forex reserves - Then this pair will gradually go up & the longs win in the long run. But SNB is still buying lots of EURs - see SNB weekly monetary data. I don't see this to stop/slow significantly anytime soon.

d) However Grexit and German court decisions are looming. - May cause an upward spike in EURCHF. If ESM decision is negative, EUR drop, then SNB will buy more EURs, selling CHF - go back to item c) = up!

e) Next year there will be elections in Germany and Italy - don't see any problem in Germany. Italy will be like Greece - EURCHF longs did survived thru the Greek elections thanks to SNB holding the floor - see item c).

f) Inflation is non existing now, but you might have a glance what happened in 1978-1981 after pegging or generally the effects of increasing liquidity on inflation in Switzerland. - There is a looming threat of deflation - see today's CPI data. CPI's hard to go back to zero. What mistakes they made >30years ago cannot be applied now. We are now strongly playing with "fiat money". See Robert Kiyosaki's "Conspiracy of the Rich" book. I remember the 1980's Swiss introduction of negative rates failed, but see Denmark now seems to be ok. Do a small -ve rate to scare those savers away from Swiss banks - it will help SNB a lot.

So possibly the SNB is working on a less strict intervention policy in order to avoid the obvious risk: massive foreign currency reserves and then inflation going up.
SNB is certainly having a headache now, but the recent support of Swiss ministers on SNB policy & SNB officials repeating their support on the floor show their commitment for the medium to long term. As long as EU is in trouble, they stand to commit to defend the peg. When EU's financial mess gradually clears, cash will automatically flow out of safe havens & CHF will automatically experience devaluation.

I'll stay put for now - scalping has never been better these days!
  • #8,955
  • Aug 7, 2012 12:25pm Aug 7, 2012 12:25pm
I mostly agree with Alaneth,
Today Switzerland FinMin said that the SNB can hold unlimited amount of reserve, not a new word but a new source. Some days ago Jordan said the SNB can hold unlimited amount of reserve in theory, but the 2 main SNB responsibilities are motivating economy and price stability, well, GDP and Unemployment rate show that the peg has been successful in the first but CPI shows the failure in price stability and it will get worse n both ways EZ recovery or EZ collapse. What are the measure to be taken into account by the SNB to commit price stability? Further devaluation of CHF, sth that will come sooner or later.
  • #8,956
  • Aug 8, 2012 3:56am Aug 8, 2012 3:56am
Heard that swiss banks only executed long TP's up to 1.2025 in recent spike.
  • #8,957
  • Aug 8, 2012 6:04am Aug 8, 2012 6:04am
Consumer prices dropped 0.7 percent from a year ago, slower than the 1.1 percent decrease seen in June and marginally below a 0.8 percent fall forecast by economists.

As indicated, the high negative inflation of June/July 2011 is now out of the YoY statistic, so the inflation is less negative.

However, the +ve trend of +0.4 is less than what I expected, so it seems to stay in low-level deflation mode for the next months.

So I agree that SNB will continue with their interventions in the mid term. In the long term the question will be what happens first: EZ crisis fades or Swiss inflation rises?
  • #8,958
  • Aug 8, 2012 6:12am Aug 8, 2012 6:12am
and now What Can we do? Sell or maintain the positions? I think that EURCHF will continue between 1,2008 or 1,2012. But maybe we have another spike. However I dont think this spike is very high.
  • #8,959
  • Aug 8, 2012 7:07am Aug 8, 2012 7:07am
Quoting alesss
and now What Can we do? Sell or maintain the positions? I think that EURCHF will continue between 1,2008 or 1,2012. But maybe we have another spike. However I dont think this spike is very high.
I'm just going to maintain my positions i missed the last spike as i didnt have any take profits on.

In these thin holiday markets it would be a ideal time for the SNB to try a bit of stealth intervention.
  • #8,960
  • Aug 8, 2012 8:37am Aug 8, 2012 8:37am
SNB is playing against us. They know that 80% of traders are long, so they controls the EURCHF between 1,2010-1,2025, no more. From september until dicember, 20% of traders were long, so SNB intervened and they rose EURCHF until 1,24. But now no, because 80% of traders are long and the peg is reliable.

If there is not inflation, EURCHF will not rise.

the next year if the housing bubble bursts and if some swiss finantial institutions bankrupts, maybe Eurchf will go up.
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