After looking at the euro/Swiss (EUR/CHF) daily chart, several traders probably initially thought the Swiss National Bank intervened in the FX markets.
They did not.
RUMOR DRIVEN MOVE
The surge in euro was prompted by rumors that a very large Swiss bank might charge 75 basis points or a full percentage points on balances over $100 million.
FUNDAMENTALS
Regardless if the reports are true or not, the euro was also stronger based on German support for Greece’s debt buyback and Spain’s unemployment rose less than expected. Now about five million Spanish are unemployed, bringing the unemployment rate to 25% (youth near 50.0%).
TECHNICALS
Price action on the EUR/CHF surged above both the 50 and 100-day simple moving average. This substantial advance occurs after the price stabilized at the 1.2030 area.
The well established peg at the 1.20 level has been successfully defended so far and further upside momentum may break above the September high and target the 1.22 level.
[Editor’s note: Did you get caught in this move? What pairs are you trading right now? Post a comment to share below.]
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