EUR/CHF

Closed a long at its best. As always, the declines are impressingly steady and linear. If one likes that, it can make a good scalping camp.

Wow ... this pair is a beast ...

Probably all in wait and see mode

I know, the referendum and SNB decision is awaited ... nevertheless EUR/CHF is not the biggest mover anyway, but the current situation is vely, vely intelesting ...

i'm betting on long a lot of money at 1.2014 with 1:1000 leverage. All my funds will be lost if the pair make 20 pips down-1.1994.

Whoa. What broker allows 1:1000, and what is your exit strategy/target?

I play in Liteforex with Lite account http://www.liteforex.com/trading/forex-calculator/ with 1:1000 leverage.
my exit strategy is when the price drop below 1.1994 im out of money to cover my margin
by the way,they offer positive swap for long on eur/chf

I'm beginning to think that this peg cannot be held. We are at a level where the central bank has previously acted and there is nothing. Additionally with the global economy in a state generally the world has become more risk adverse. I just do not see how the SNB can hold the peg it is too expensive and the SNB might have to take the worlds money.

There is some thought that they could charge a deposit rate, I don't know if that will happen though. This is ignoring the looming referendum on Nov 30th about the gold standard, if the swiss vote in favour of the gold standard the peg is done.

The high reward payoff is on the short side, question is, is it worth it?

I take it you don't have a very big account, because that is just madness. What is the carry rate btw?

My broker had positive swap on the pair..until recently.I believe they saw good money in switching to negative,as many are holding longs now.
They also have a 5 pips spread on this.And to scalp a slow turtle like eur/chf with 5 pips..its impossible..

I have also noticed it stalles completely when you look at it,and try to milk some cash.But..when you turn your head in another direction and bet your money on something else...booomm..up 15 pips

Well i trade with this pair since 2011 and i wоn a lot of money, when in 2013 the price hit 1.25 for a couple of hours.
When the directors of SNB in the near past have told again,that the floor will be sustainable and there is no reasons for trouble,i think they will be able to fulfill the promise.
I think that with 1:1000 leverage,the required margin is 1000 euro for 1 big lot with 83.25 euro win/lose per pip.
So in that price of eur/chf - 1.2015 right now,if someone put 1000 euro,he is able to make 83.25 euro per pip.
And im sory i dont know what is carry rate

5 pips seems impossible? I have 0.7 - 0.8 going up to 2 or 3 before Asia opens. I've never seen a broker with 5 pips on any pair.

Check the chart that was posted by member Caa. There is a inverse correlation in foreign currency held by SNB starting 2014, however the increase since 2012 is not dramatic. In other words, it doesn't seem that SNB has intervened much (if at all), and that their foreign currency reserves are not increasing. That makes me think that SNB has a lot of room when it comes to buying EUR, and the floor is sustainable.

Hi Paz, I am learning how to use bloomberg recently, could you please tell me some website or guidebook of how to use bloomberg? Thank you!

I don't believe it is.

Currently everyone is long eur/chf, everyone thinks that it will hold. If you go and check the position stats of the retail traders it is very heavily skewed to the long side. But the might of the financial markets can crush even a central bank, the SNB can in theory buy up unlimited euro, in practise however it cannot increase its balance sheet at an enormous rate, because ultimately that is public debt and it will have to be sold back to the market at some point and any losses are tax payers.

There is no end in sight for this peg, the euro area doesn't look so good, japan in another recession and since CHF is a safety currency the pressure on it is going to keep growing. It is going to get expensive to maintain the peg. Some have speculated that the SNB might charge for holding deposits, but I don't think that will deter the markets if they truly become risk adverse.

Of course I am talking smoke right now, I'm not going to take a short position at this moment, but I might soon, all the reward is short, long currently only has limited upside.

Long term every peg fails if pressed enough, because trying to enforce it at all costs will wreck a currency and an economy.

interesting. thanks for the info. what is your profit exit strategy? out at a set # of pips?

What's the old saying about the number of real winners long term in forex. Here is what bothers me about the EUR/CHF and why I stay clear... at least for now. Everyone (well not everyone) but majority of people here on this forum and on the streets a betting on the peg holding. The charts which show the high of the EUR/CHF came in May 2013 and since then the long term trend has been down - despite all the bullish concerns and speculators who believe in the SNB and holding to their word. Since October it has been a slow grind down to the current levels from 1.2120/30. I have seen many many accounts just averaging down, averaging down and in some cases martingaling as they believe the 1.20 area is a solid as the words of the SNB.

I just can't buy it. With the referendum coming up and what ever the outcome I just think there will be fireworks. The shear volume of stops (jassson as an example on this page) and the total order volume as people load up closer to the peg because they are looking for a massive spike to get rich has me thinking that there will be an initial land slide as massive funds clear out the stops before getting a position in at a point where the SNB really needs to act.

I don't trust the words of a central bank. They have all be extremely poor even before the GFC so why would people be putting so much faith in this level. Im out. If I miss the spike then so be it, ill move on, but if we get a solid punch through and all those orders get hunted then perhaps I will put in some longs when it looks exhausted.

Just my 2 cents but do you own research.

From an outlook technical view you are right, EC had been on long term downtrend, if it was any pair(no floor), am totally with you that longing it would be plain stupid! But, knowing SNB last firm decision came out with a statement when the floor broke by some 2 pips, assured that it had not actually broke(not the long price, least), some fake brokers had 10 or maybe 20 pip break!!! that's non of our business, clients be responsible of choosing your brokers

Highlighting at what you said about quick dip then spike just to clear stops is the only thing that worries me but again SNB stands firm in defending the peg, we tested it last time and it succeeded when eurozone problems were worse or same as currently. Nobody forget that EC stayed on current price long long months, we are now here stalled just because bears are betting on Gold BSand SNB seems stupidly doing the same.
Another worry is SNB language of if Gold BS pass it will be difficult to hold the floor. I just don't wanna think that SNB is saying that to clear up its responsibility if 1.20 breaks later on.

You mentioned an illogical trading idea in your post. How can you determine what level below 1.20 EC will stop after clearing stops???? I said it before, below 1.20 there are no clear level9quite some but it will only be gambling entering on a spike down!!!), so longing or generally trading EC under 1.20 would be much worse than betting on 1.20 hold

You even didn't suggest what EC Bulls must do before Gold BS???, when they have many positions located on higher levels than the current, exit it all on big loss when there's still big hopes of 1.20 holding(EC spiking upward) and Gold BS yes vote loosing

I advice EC Bulls to hold on their positions, we are just 10-15 pips from the floor, closing your orders now would be done by idiots only, when the worst that can be done is waiting less than 2 weeks from now, if Gold BS yes campaign wins, set a stop loss at 1.1990.
I believe EC would hold until SNB decide otherwise, or if it breaks would not do it for few pips, it would be 50-100 pips least, since again SNB decision is to defend it, when it breaks, there decision would have changed so it will be left for free market play..................where no level guaranteed.

By the way, I would never blame bears on 1.20 break if happens because this is what they do(all the time risk their accounts on no guarantee outcome but highly risky trades,) but will fully blame SNB because it would be very dirty action from them to keep EC on current price before Gold BS. Not even a single spike many EC Bulls are betting on to close higher positions that are the main drawdown problem would be very dirty from SNB

If anyone remembers my past months posts when I said the worst that SNB might do is let it slide down to near 1.20 then announce remove of floor for any reason!! If this becomes reality later on then nobody blamed but SNB for reckless action(not even negative rate on deposits) when they have many options like the latter, huge intervention or spikes of 50 pips from time to time....................

Anyone knows when will new polls stats be published??? It is very quiet!!
In Scotland independence vote it was updated every few days or so, in swiss it's once or twice per month

And, is there a way to look at SNB foreign currency reserves current updated amount before the next official release??

Still betting on a move to 1.2050 or late 1.2070s before Gold BS as volatility will target high levels as voting nears and the peg clearly not gonna be penetrated before Gold BS

Paz,which broker is that?

A Swiss online poll says the Swiss are to reject SNB Gold Initiative; 59% will reject, 41% are in support of the gold initiative

source bloomberg