EUR/CHF

Hahahahah yes thats exactly what i thought,maybe time to put some shorts on!

When I read the article http://snbchf.com/2013/06/chf-price-...-eur-chf-1-30/ (written in June, I think)
George Dorgan asks the question if it can rise to 1.30 and give arguments pro and against.

He answers that if it rises to 1.30 then it must happen quickly before Swiss inflation rises and SNB must exit the cap and hike rates one day.
3 months have passed and EURCHF is down at 1.23 again, around the levels Dorgan spoke of in the old post.

The reasons why EUR/CHF might touch 1.30.

Thats what it said on the article and coming from someone like george dorgan who as pipxster said wrote a article on why the euro wont go above 1.22 to the chf its quite a turnaround.

Forex is like that when macro data change. Take Steen Jakobsen
Jakobsen: US reality is increasingly dire http://www.tradingfloor.com/posts/ja...ire-1268345411
and 7 months ago he is was extremely bullish on USD because of shale gas. http://www.tradingfloor.com/posts/my...tion-829750039

Or Ashraf Laidi: US Dollar Ends Another 9-Yr Down Cycle http://www.ashraflaidi.com/articles/...-yr-down-cycle

and 3 months later: USD Malaise Continues, China CPI Next
http://www.ashraflaidi.com/forex-new...china-cpi-next

Still George Dorgan was right for about 1 year with 1.22 or 1.23 max (from February 2012 to Jan 2013)
http://snbchf.com/2012/02/will-the-e...er-1-22-again/

Things are a bit more complicated. The Swiss franc has two sides: A safe-haven like the yen, but also proxy for German and global growth (as counterpart against USD). Foreigners buy Swiss stocks in order to participate in global growth and have safety at the same time. Without SNB intervention this moves CHF upwards. Especially in 2012 the SNB had to increase her balance sheet just to counter these foreign purchases of Swiss stocks.

(here details on the international investment position http://snbchf.com/2013/07/snb-swiss-...ment-position/)

When China and Europe were weak in April to June 2013 I really thought that EUR/CHF could rise and was right.
In the meantime Europe and China have recovered a bit and foreigners are still buying Swiss stocks; the SMI is up 14% this year.

At the same time Swiss inflation gets closer and closer to Europe, in the European HICP inflation measure it is already 0.5%, the gap to Europe only 1.1%, down from 3.9% in early 2012.
http://snbchf.com/2013/08/inflation-...rland-narrows/

With the continuing Swiss real estate bubble and rising inflation, CHF could end up like NOK and become a real risk-on currency !
Higher inflation and higher rates than in the euro zone. Then CHF will rise, but this moment will be rather remote (3-5 years). In the meantime the SNB could keep the floor and rates at zero but Swiss inflation and wages rise. In this case Swiss stocks could get less interesting for foreigners (negative real rates, rising wages), but a weaker franc will increase inflation even more.

Finally the only way to weaken CHF in the longer term is a carry trade: Far higher ECB rates than SNB rates, at least 1% difference or more is needed for money market funds, current 0.5% is not enough.

I know you guys are very much on the technical side, but I suggest reading our daily fundamental explanation of CHF (and gold) movements. Apart from the 1.20 floor, CHF is purely driven by global macro (funds) and global capital (e.g. equities) movements but not by FX traders or the SNB.

http://snbchf.com/2013/07/understand...ice-movements/

Swiss National Bank says the cap on the Swiss franc “is the top priority”
50 minutes ago | August 11th, 2013 06:58:03 GMTby Eamonn Sheridan | 2 Comments
Jean-Pierre Danthine,the Swiss National Bank’s vice chairman, told Swiss Sunday newspaper Le Matin Dimanche
“At the moment, the cap on the franc is the top priority”
and that it will enforce its cap on the Swiss franc for as long as it is necessary.
He said that the SNB’s cap on the exchange rate limited its capacity to act on interest rates, but, in addition, “The opposite is also true: we’re intervening on exchange rates because interest rates are at zero”.
He added
“On the day the SNB decides to raise short-term interest rates, there can no longer be a cap that’s being enforced”

1. Said rates will rise again “one day”
2. Said banks are underestimating the risks, and that a rise in rates would have a “significant negative impact on banks”

Maybe the banks are underestimating the risks, but Swiss consumers seem to be more cautious, data on Wednesday showed Q3 Swiss consumer confidence coming in 10 points lower than economists forecast


Although he says cap is the top priority it also sounds like they are preparing for higher rates and cap removal.
I wonder if it may gap down at market open?

some background on swiss job market

DJ UPDATE: Swiss Workers Feeling Euro Zone Pain
08-aug.-2013

(Adds that higher rate was expected in 5th paragraph)
By Neil MacLucas
ZURICH--Switzerland issued unemployment figures Thursday that would mean bragging rights just about anywhere else in Europe. But in a country that makes most of its money from selling medicine, watches, machines and tools to the euro region, the new numbers were cause for concern.
Switzerland's jobless rate edged up to 3.0% in July, compared with 2.9% in June and 2.7% a year ago. Despite the increase, the data looks very decent compared with the rate in the sluggish euro zone and in the European Union as a whole: 12.1% and 10.9% respectively in June.
"While we have seen a slight uptick in the Swiss jobless rate, I think many of my foreign counterparts would have been proud to present these figures," said Boris Zuercher, the new Swiss director of labor.
And that's just the problem.
Mr. Zuercher said the increase in the jobless rate, the first in five months, is confirmation that Swiss workers are feeling the euro zone's pain. The weak euro zone has long been a drag on the economy and jobs, and SECO had projected a jump in jobless in the second half of the year.
"The rise in the Swiss July jobless rate was due to seasonal factors like school leavers entering the labor market, but also reflects economic factors like weak demand for Swiss industrial goods," Boris Zuercher told The Wall Street Journal in a telephone interview.
The Swiss economy is suffering from weak demand for Swiss goods from recession-hit European economies. Machinery and electrical exports dropped almost 4% in the first quarter, with orders 1% lower, according to the latest data from Swissmem, the group which lobbies for the metal industry. The 17 nations using the euro buy around 55% of all Swiss exports.
Mr. Zuercher, who took over the Labor Directorate at the State Secretariat for Economic Affairs, or SECO, this month said higher demand for workers is unlikely anytime soon. Euro-zone weakness, together with the strong Swiss franc, are likely to weigh on the Alpine country for the rest of the year, he said.
An employment barometer compiled from a survey of Swiss companies and their expectations for hiring or firing in the coming three months, has held in negative territory for five of the past six quarters, according to data released Monday by the KOF economic institute.
For now, SECO expects the Swiss jobless rate to average 3.3% this year and next. It will update its unemployment and growth forecasts on Sept. 19.
The Swiss central bank's floor of CHF1.20 per euro, imposed in September 2011, remains vital for export competitiveness, said Mr. Zuercher.
"The Swiss National Bank's floor for the euro/franc is still very important for the Swiss economy," he said.
The jobless rate among young people in Switzerland also edged up last month, though it too remains well below youth unemployment patterns just beyond its borders. Only 3.1% of Swiss workers under 24 years were out of work, compared to 23.2% in the 27 countries comprising the EU.
The Swiss labor market is in better shape than in January, when the rate was 3.4%. For that, the country can thank its consumers, including wealthy migrants from the sickly euro zone. Data in May showed first-quarter gross domestic product growth quickening on robust private spending. Strong investments in the building industry also contributed.
One of the key pillars of Swiss GDP growth in recent years has been domestic consumption and the booming property market, helped by historically low mortgage rates, and the arrival of affluent people seeking lower taxes and better job prospects. The record-low bank lending rates stem from the SNB's expansive monetary policy aimed at damping global investor demand for the franc.

Well everybody in this room knows I am Bullish on this pair, but this is not to support my idea,
I really have no idea how some people talk about rise in interest rates by the SNB, I can't see such a thing in foreseeable future,
You are right about the vice president and he is certainly right when he says there will be no peg if the interest rates hike, but when they hike. When CPI is still negative and overvalued CHF is weighing on Switzerland economy how can rates rise? You may think their economy is well shaped but the expectations from their Economy is much more than E.Z, the SNB is concentrating on price stability and Economy minister on economical figures and none of them is pointing toward such a thing, let's be more direct if such a peg removal and higher rates were possible, everyone would go short on this pair with a SL on 1.27 and awaiting 1.1 in a flash after removal which wouldn't be the ending to this story. In addition let's check exchange rates from last year; GBP, USD, and JPY have lost a lot against CHF and just the EURO has gained about 300 pips which is less than a 2.5 percent which could be ignored and let's say 55 percent of the exports depend on EU but other 45 percent must be under pressure. To me if 1.2 was chosen as a peg it was for that time expecting the exchange rate rise after EZ structural problems removal and if it doesn't rise on its own then the adjustment will be held by the SNB.

When I look at the 4 hr chart for this pair all I see is lower highs and lower lows I'm not sure but it seems like we may have to make a new low before this is ready for more up Ickomoku also suggests that we have more down to go not sure though

What chart are you looking at? Smoking it a month ago. Look into the EC 4 hr. chart from a week ago= HH's HL"s

Fundamental have an impact few times= just in the main news like NFP and FED, BOJ, BOE, BOC, RBA, RBNZ Press Conferences = Forget the rumors and articles after EC spike, wait for some pop out sooon!!!!!!!!!!!
Technical trading rule the floor. LONG LONG LONG EC Do not get surprised after seeing EC 1.25 sooooon, one obstacle in the way 1.2395-00. If that does not happen sideways 1.23-1.24 would continue.

Closed 25% of the longs @2395 with +90 on average

nice attempt to break out from the triangle formation on w1

Hi pipxster that's good leaving a bit to run what is your target do you think it's gonna push through 1.24650?

im in from 1.23 and still holding them all just arguing with myself about taking some profit.

Hi Brinks, no fixed tp set will close gradually (around 1,246 yes and also watching 1,27 current upper TL on w1) on PA and fundamental news, I think we will push 1,2465 in the next 3 months for me daily or even more weekly close will tell if now or not, however break of the formation on w1 could be encouraging.

Thanks pipxster always the worst part of my trading taking profit either to early or not taking it and watching profitable trade close at break even anyway just closed a few off and got a largish position still running.

1.24 Has now got to be strong support surely.

H1 and H4 seems like a forming flag currently points to the upside for me...anyone?

Edit:flag destroyed

The bulls have given up again

4hr stochs rolling over overbought a 5/8 cross now starting looks like it heading down.

No giving up there, brinks, just a couple of short term bulls and technical traders taking profit. Don't foprget: It's never gonna go to 1.30 in a straight line, but you'll always see that pattern of spike - profit taking - consolidation - next spike - next profit taking etc., occasionally interrupted by a spike down on panic news, which are good occasions to reload or building up your position. In the big picture though this is a one way road, as the SNB will not let go of the cap before we stabilize above 1.30.

with the last h4 close its starts to be really interesting...