EUR/CHF: One Year of Free Market (07/2010-07/2011): October 2010

EUR/CHF up at 1.3680 from early 1.3635.  Talk of 1.3700 option interest.  Guess we should expect some defensive selling to kick in then.

As I wrote yesterday, I thought this was a bad trade anyway, jumping in with the herd simply because it was headed in one direction. Putting on a medium-term trade with aggressive profit-limits and then cutting it less than 24 hours later because the market went against you in the short-term is certainly not a good look.

They have also cut their existing long EUR/CHF and EUR/USD positions.

No change in the prognosis here with heavy demand below 1.3850 providing a base overnight and there is also talk of barriers at 1.3800 which will be protected. With the topside also heavy with option-related selling, we can expect more range trading for the next couple of weeks.

The EUR is a bit of a mixed bag on the crosses, resurgent against the CHF but looking heavily overbought against the GBP, so no big directional hints coming from any of the cross pairs.

Keep your range trading hats on until some new developments change the landscape.

The dollar is showing strength across the board today with covering of stale short positions the primary driver.

USD/CHF has pushed to a new session high at 0.9860 and more and more that pair looks like it has made a bottom. EUR/CHF is rallying as well on a day where the EUR us generally softer, indicating that it is demand for dollars that is the likely driver, to my mind.

We’re not getting much help from other markets today. Stocks have been trading just below breakeven on the day for most of the session after a lower open and oil has been narrowly range-bound. Gold is not giving us any fresh direction today, trading in a narrow range itself. Firmer US yields are a plus for the greenback today, however.

EUR/USD trades at 1.3857, above earlier lows at 1.3838.

They apparently went long EUR/CHF on Friday at 1.3536.  Target 1.4500. Stop loss 1.3305.

We’re presently at 1.3640.

EUR/GBP and EUR/CHF both made strong gains on Friday night.

As I mentioned on Friday, the EUR/CHF order board gave us a lot of clues with big bids on the downside and stops above the market. Those stops have now been triggered and it looks like we have moved on to a higher trading plane with obvious parameters at the 100-day and 200-day MAs which would give us a new trading range roughly between 1.34/1.39.

EUR/GBP has also made new highs but interestingly on Friday we heard about big stops above .8935, and that was the ding-dong high. Obviously somebody knew about sell orders close to that level and it’s a small market at the core. That level is also approximately where the strong bearish trendline from .9800 through .9415 sits so if we get another failure there, then watch out for a major profit taking move lower.

• USD/JPY: Kampo and China buying dips below 81.00; Real-money funds and Japanese corporates selling above 82.00
• EUR/USD: Option related bids 1.3850/60; stops below 1.3825; light stops above 1.3945; sell orders starting 1.3980
• EUR/CHF: Plentiful bids reported starting at 1.3420; stops at regular intervals above 1.3550 and 1.3600
• EUR/GBP: Bids around .8800; offers solid .8900/20; heavy stops above .8935

EUR/CHF up at 1.3445 from around 1.3410 when I arrived with a UK clearer said to have been notable buyer of the cross in this latest leg higher.

EUR/GBP up at .8785 from early .8765.  Talk of sell orders up at .8800. I’d like to know where buy stops are. Anyone got a clue let me know. Thanks.

Yesterday in Asia we saw AUD/JPY fall and overnight there was a very big fall in GBP/CHF, both traditional risk pairs. This suggests to me that we may be entering a slightly different phase where the market concentrates more on cross pairs rather than solely on the USD, but a bit more evidence is needed.

USD/CHF is close to daily support at .9555 and EUR/USD is nearing technical resistance at 1.3935.

Good luck today.

Not sure if there is an M&A deal going through or what but it sure feels like there is some sort of discrete flow in GBP/CHF going through that is distorting the market. EUR/GBP has been rallying to beat the band throughout the US session, accelerating to the topside after the FOMC minutes. Important resistance at 0.8805 was broken in the process, triggering stops which took us as high as 0.8820 so far.

EUR/CHF has been offered all day, sold off heavily by a US investment bank earlier in the day. It has recovered a bit in the hour or so as EUR/USD shot higher….

The EUR is on its session highs against the USD, JPY, GBP and CHF. There have been no major news developments but the single currency continues to find demand on dips, making life very difficult for top-pickers.

FTSE down 0.75%; DAX off 1.2%, CAC 40 off 1.28%   Oil off around three quarters of a buck.  Gold at session low 1,314.50.  US treasury yields lower. All signs of a pick up in risk aversion.

Against this backdrop swissy’s safe haven premium has come into play this morning, EUR/CHF down at 1.3310 from early 1.3450.