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

The cross is presently up at 1.3445 from session low 1.3382, with hedge fund buying being noted.

Which takes me back to what Barcap said recently ie they saw the cross in 1.32-1.3600 range, prefering to sell into rallies.  OK it traded over 1.3600 but not by too much and not for too long.  If you’d followed the advice you’d have enjoyed this morning.

Many thanks to Forexjunkie for the link to this piece of typical trader/salesperson dialogue. Yes, the salesguys always win and us poor traders always get stuffed. They call us flatliners  (Little piece of choice language involved so if you’re sensitive, please avoid).

Unusually for this timezone, EUR/CHF is the first mover of the day. The cross closed in NY near 1.3490 but has already fallen 60 pips.

Thanks for pointing out that Tokyo is in fact closed today and that will reduce liquidity even more.

The initial positive reaction to the EU/IMF proposed bail-out which we saw in Asia and early Europe was reversed during NY forex trade. This is the last week of full trade before markets start scaling back into December so we can expect less liquidity and sharper moves in either direction. The other majors remain reasonably stable so the EUR pairs remain the most likely source of volatility.

The economic calendar is quite empty for the session.

Good luck today.

Try as we might this morning, 1.3650 continues to attract buyers. We’ve bounced back toward the 1.3675 level and it looks as though the reports of EUR/CHF buying are at least partially true…

That cross is at session highs of 1.3670 with 10-minutes to go before the fixing.

Risk-aversion is lessening as well, with stocks and commodities both well above early-session lows. S&P -0.2% and CRB down 0.7% versus -1.1% earlier.

Upwards of 3 yards of EUR/CHF has to be bought at the 16:00 GMT fixing, traders report. Looks like the market is getting ahead of it…

USD/CHF made another run for 1.00 but protection of barriers is holding back the tide so far. there is another rumored at 1.0020.

We got an inkling that this might happen when pairs like EUR/JPY refused to fall significantly when the Irish debt woes were hogging the headlines. Now that the crisis has eased somewhat, we are seeing strong rallies in EUR/JPY, EUR/CHF etc. EUR/JPY will again be the lead pair in Asia and the obvious technical target is now the previous high and 200-day MA at 115.40.

Good luck today and TGIF.

If current moves are all about Irish debt woes and possible contagion, then why over the last 24 hours is the EUR higher against the GBP, flat against the CHF and only slightly lower against the JPY? Sorry I don’t have an answer, just a question this time. If the market was really convincingly bearish on the EUR then it would be lower across the board.

I’m not convinced yet and last time I was also difficult to convince and EUR/USD fell to 1.18- maybe there are still a few sceptics out there who haven’t learnt their lesson yet.

Not much change overnight from our closing levels yesterday. The EUR and USD remain the most vulnerable currencies with all of the other majors enjoying brief periods of sunshine. Tomorrow’s G20 is the next big risk event and whilst most commentators expect no major developments, a small risk still exists that a slanging match develops and the currency wars (whatever they are) recommence. Position-wise, the market seems to be quite neutral and I remain of the view that playing crosses like EUR/CHF and EUR/AUD from the short-side (although they have already made significant moves) is the most obvious trade this week.

Good luck today.

• MOF has only intervened on one day in recent times, Sept 15th
• Mixed reports on the upcoming G20 with some reports saying that both the US and China are softening their respective stances
• Elsewhere a Chinese newspaper warns of the disastrous consequences of QE2 which could include currency wars and global economic problems
• Gold and Silver make new highs before falling back
• The Nikkei rises 1%
• Greek PM stays in power after weekend elections

The markets were quite thin and volatile today and this enabled stops to be triggered either side.

EUR/USD pushed higher in early trade after the results of the Greek election were announced and also as weekend shorts covered their positions. Dealers aimed for and triggered weak trailing stops above 1.4080 before turning lower. Next up were stops below 1.3995 and there was a nasty gap lower through these. EUR/JPY selling then compounded the alls but decent sized bids in EUR/USD just above 1.3940 managed to slow the fall. Ranges: EUR/USD 1.3919/1.4084, EUR/JPY 113.05/114.28, EUR/CHF 1.3440/1.3554

The other majors have more or less followed the EUR around, but to a lesser degree. Cable rose to 1.6211 before falling back on GBP/JPY selling out of Tokyo. Ranges: Cable 1.6108/1.6211, EUR/GBP .8639/92

AUD/USD has also been primarily influenced by flows in the crosses like EUR/AUD and AUD/JPY. Ranges: AUD/USD 1.0092/1.0165

USD/JPY has ignored the rebounding greenback and given up a small amount of ground as the selling in the JPY crosses dominated. Ranges: USD/JPY 81.15/43

Markets: Nikkei +1%, HK and Seoul -0.1%. Gold $1390/oz.

Looks like the franc is providing a safe harbor for those who want to be short dollars but are nervous about holding EUR/USD longs amid a rekindling of sovereign debt tensions within Europe.

EUR/CHF has come off to 1.3700 from 1.3780 in early US trade as traders trade in their tainted euro for the less-debt-riddles franc.

Hot money flows have been particularly heavy into the franc against both the dollar and euro and some of the accounts moving out of the majors is not very exchange rate sensitive, if you get my drift.

1.3650/65 is a solid area of support on further EUR/CHF dips.