EUR/CHF fell for the Tuesday session as traders seem intent on testing the resolve of the Swiss National Bank. The SNB has a “floor” in this pair at the 1.20 level, and as a result the market has been well above it for several weeks now. However, it looks like we are going to find out exactly how much resolve the SNB has about that level soon if this keeps up.
Buying at this point probably isn’t prudent. In fact, we prefer buying close to the aforementioned 1.20 level, as the SNB would certainly be forced to act to keep its credibility. If it didn’t defend that level, the market would pile on and punish the SNB for its bluff. We don’t think they will allow that, and as such we are very interested in buying this pair the close we get to those level. Until then, we are flat of this market.
EUR/CHF Forecast January 18, 2012, Technical Analysis
Originally posted here
