Shadow of the SNB must be taken into consideration.
Why such an impairment?
Since early November, the single currency has dropped more than 8% against the Swiss franc in almost a straight line. There were several reasons.
course, this weakness of the euro due to the renewal of tensions related to debt issues by peripheral countries: Ireland is at the bottom of the hole, Portugal no longer very far, Spain is still mired in the same housing slump, but for the time saved by its debt ratio is still low. The fact is that Spain is now forced to pay a premium to get lending markets. In this context, the counterparties of the euro can only perform well, which is especially true for the Swiss Franc, which traditionally plays the role of safe haven.
The other reason is the confirmation of the strength of the Swiss business, with exports still strong despite higher prices of their currency, and above all with a very positive domestic consumption.
I was forced to stop my writing lately, but you've probably noticed that I stayed active on Twitter, albeit in a much more concise.
I closed my last short position on EUR / CHF 1.2765 to CHF approach, the previous record low reached in early September, may miss the continuation of the movement, especially since no sign of reversal bull can not be identified at present.
Scenarios to consider
We enter in the holiday season, coupled with extremely low liquidity, including forex. This can cause sessions quite insipid, or conversely very volatile since the players can more easily influence prices. What makes me think that the NBS could exploit it to speak again, after making weapons last summer. The SNB may not have any interest to intervene now, since the European tensions persist, and the result of this fact might last only a few weeks (the NBS has already suffered losses in its past interventions, This is why it is suspicious). Moreover, the President of the Swiss National Bank, Mr. Hildebrand was quoted as saying that the euro could fall to CHF 0.5 in case of contagion from the crisis of government bonds in Europe. Still, the window procedure seems ideal as noted Julius Baer. After the comments last week (possible intervention in case of continued deflationary pressures caused by higher hence the franc), everything seems possible. At least it is only an attempt to bluff, far less costly than intervention in practice.
the beginning of this week, I maintain I prefer shorts without having to open so far . Yes, unfortunately I wound up too fast last week ... Only a crossing bull 1.2800 followed by a close above that level would convince me to go along with the CHF 1.2850 and 1.2930 in the crosshairs (simple technical rebound). With the successful passage of 1.3000 Swiss francs, which would probably along the crossing bullish moving average and 20 sessions, it might be possible to speak of true reversal. Very hypothetical for now.
good trades and good afternoon. Very quiet until Wall Street and no new major expected.
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