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EUR/CHF Reversed 1.0500 Rally Post SNB Official Comment

Posted by Chris Advincula on Mar 27, 2015 8:58:00 AM

USD.CHF.5min resized 600

Chart: WorldWideMarkets Alpha Trader

Euro Swiss initially made steady gains from 1.0470 to 1.0506 from the prior Asian session to the early part of Europe stemming from both short-covering gains and as the market continued to digest the hawkish comments yesterday from Swiss National Bank member Fritz Zurbruegg.

Zurbruegg said the SNB will "intervene in the forex market as necessary" adding that the swiss franc remains "significantly overvalued."

He said the negative rates and a decision to scrap a cap on the swiss franc would pose a challenge for the country's economy. But the rates, which are effectively at -0.75% on bank deposits will help contain the franc and give the economy room to adjust.

The dollar firmed and made extended gains and pushed both USDCHF and EURCHF lower as the European market went underway. EURCHF fell from 1.0506 to 1.0457. (8:20GMT)

1.0500 looks toppish with offers buidling up and a double-top formation on the 10-minute chart with 1.0455 the intraday support. Swiss buying interest looks intact pushing the EURCHF lower as Saudi Arabia and its Gulf allies continue their air strikes for a second day in Yemen against rebels backed by Iran. Morocco joins the Saudi-led campaign.

The 14-day moving average resistance is 1.0497 and support at 1.0460.

EURCHF.10.MIN resized 600

Chart: WorldWideMarkets Alpha Trader

Topics: USDCHF, swiss national bank, Swiss franc, EURCHF, European Session, Forex Market, technical analysis, Fundamental Analysis


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