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

EUR/USD is trading around 1.4390 and USD/JPY is at 77.20 as the market awaits the latest developments out of Washington. Risk pairs like EUR/JPY and EUR/CHF are likely to be whippy this morning as the headlines hit the newswires. Good luck out there.

Ranging again this morning just above the 0.7990 level which is being protected again by a major NY bank.

I’m told there are bids on the machines of around $500 at  0.7992, which is currently deterring further pushes.

Some macro sellers have been seen in the EUR/CHF this morning with a low of 1.1420. Bids are now reported towards 1.1405 seen on July 18.

Dollar is trading around 0.8010 with the cross around 1.1435

of 0.7990 on the EBS trading platform. Yesterday there were very large bids  from  a major US bank  protecting a barrier at the level, which looked to be still in place.

Guess there’ll be a stewards enquiry on it..

EUR/CHF hit lows of 1.1426 on the move

USD/CHF is around 0.8000

Overnight notes from the interbank market suggest that heavy selling from leveraged speculators was the main driver behind the move lower in EUR/CHF.

I still don’t get it. There is an ever increasing possibility that the US credit rating will be downgraded or even much worse, the US could start defaulting on some of its debt. This would create total havoc in the financial markets. As a hedge against this, you want to buy CHF? You cannot be serious. The CHF which is so dependent on it’s banking system and the whole world is already limit long CHF, or?

I know the market is always right but if and when it needs to change its opinion on the CHF, there’s gonna be one almighty bubble burst.

KOF for june unchanged at 2.23

No reaction in EUR/CHF or USD/CHF

Notably a big swiss name selling EUR/CHF, and ongoing EUR/AUD sales from Asia earlier.

EUR/CHF sharply down from around 1.1630 to  lows of 1.1581 with EUR/AUD off another  10 pips from Asian lows around  1.3120 to 1.3110

EUR/USD dropped to 1.4480  just now

Looking at trends over the last 2 weeks in the main EUR pairs:

• EUR/USD bullish
• EUR/GBP bullish
• EUR/CHF flat
• EUR/JPY bullish
• EUR/AUD mildly bullish

Taking into account what’s happening in USD/CHF, USD/JPY, cable and AUD/USD; if you’re a trend follower then there is no excuse for not being long EUR/USD or at least trading with a buy-dip strategy.

Reasonably quiet night with only the CHF making any sort of move. Moody’s downgrade of Greek debt wasn’t unexpected but it did remind the market of the inherent dangers of being long EUR. With the ugly contest still a close run thing, EUR/USD didn’t move.

I’m expecting a reasonably quiet session with RBA Governor Stevens’ speech a possible source of volatility.

Good luck today.

As risk goes out the window with a low of  1.1555.  Some  technical support round these levels  before the July 19 lows of 1.1515

USD/CHF has opened lower for the 2nd Monday in a row as US debt talks now take centre stage. The lack of any firm agreement on raising the debt ceiling is undermining the greenback as well as increasing risk-aversion, a perfect storm for USD/CHF.

USD/CHF closed at .8180 on Friday and has traded a range between .8100/25 so far this morning in early interbank trade. EUR/CHF is down at 1.1680, USD/JPY is at 78.25 and EUR/USD at 1.4380.

Good luck today.

Interbank reports from overnight trade are coming through and they all say the same thing; leveraged accounts were the big buyers in all EUR pairs and real money funds were the predominant sellers into rallies.

Heavy selling by these funds was most recently noted in EUR/USD above 1.4400 and in EUR/CHF towards 1.1800

Trip the EUR/CHF stops above 1.1760, that is. 1.1757 the high so far…

EUR/USD stops are rumored in the 1.4380 area.

Sharp gap higher in EUR/CHF as stops above 1.1700 were triggered.

I’m booking partial profits on my recent EUR/CHF longs as I don’t trust early Asian moves but I’ll stay small long just in case the move continues. There’s a 38.2% retracement level (1.2345/1.1370) close by. The high so far has been 1.1743.

• EUR/USD: Major technical resistance around 1.4290
• EUR/CHF: Short-term resistance 1.1725/50
• EUR/GBP: Short-term resistance .8850

The prospect that the EZ might be about to under promise but over deliver will be worrying EUR bears. The above resistance levels will probably slow down any rallies but beware of bullish breaks as there will undoubtedly be stops sitting above all of these levels as well.

ForexLive: 86% chance it won’t!

If you are desperate to buy EUR/CHF, here’s a rumor that is right up your alley: There is talk that the SNB is looking at creating a CHF 100 bln sovereign wealth fund to invest around Europe.

Perhaps a Greek isle would strike the fancy of the land-locked Swiss….

EUR/CHF and USD/CHF have rebounded strongly in the last two days after both posted new record lows on Monday morning. The prospect of further delays in both EZ negotiations regarding a 2nd Greek bailout and in US debt ceiling talks was the driver behind the surge of CHF buying. Now that some hope has returned to both sets of talks, we are seeing CHF short covering emerging. Both EUR/CHF and USD/CHF have fallen a long way so if serious short-covering happens, we will see big rallies in both pairs.

• EUR/CHF: I’d play 1.1500/1.1750 range in the short-term and the next big move will depend on the outcomes of the talks
• USD/CHF: Short term range looks like .82/.83

Looks like this could be the critical week for both big economic regions with Thursday’s EZ meeting and the on-going US debt ceiling talks looking like they may provide some positive outcomes. The CHF has given back some of its recent gains and precious metals also fell quite heavily, late in the NY session.

The economic calendar is looking quite bare for the Asian session so we’ll need to watch the newswires for sentiment-affecting headlines.

Good luck today.

For more than a day , we’ve been rallying sharply in EUR/CHF, mostly on the back of a potential deal between Germany ans Switzerland for German account holders to pay tax on their accounts. The bounce was approximately 2.75 centimes in a little over a day. We’re now seeing a pullback from short-term overbought levels and a fairly clear bearish divergence. Support is not seen until down at the 1.1595/00 near-term.

Bloomberg  article

This story is said to be lending the EUR/CHF cross some support this morning. Presently up at 1.1610 from 1.1550 when I sat down.

The gap lower from Friday’s close at 1.1550 to stop-loss levels below 1.1400 has now been closed with the market back trading near 1.1550.

Not sure why, but it ain’t an obvious intervention…EUR/CHF up toward 1.1500 despite sky-high sovereign jitters in Euroland…

No mention of SNB intervention.

Lets be honest if they’d been seen intervening we’d be a lot higher now.

Cross sits at 1.1470 from around 1.1430 when I sat down.

Talk German bank notable buyer in recent trade. Maybe a bit of profit taking, who knows.

• EUR/USD: Major technical resistance around 1.4290
• EUR/CHF: Short-term resistance 1.1725/50
• EUR/GBP: Short-term resistance .8850

The prospect that the EZ might be about to under promise but over deliver will be worrying EUR bears. The above resistance levels will probably slow down any rallies but beware of bullish breaks as there will undoubtedly be stops sitting above all of these levels as well.

ForexLive: 86% chance it won’t!

If you are desperate to buy EUR/CHF, here’s a rumor that is right up your alley: There is talk that the SNB is looking at creating a CHF 100 bln sovereign wealth fund to invest around Europe.

Perhaps a Greek isle would strike the fancy of the land-locked Swiss….

EUR/CHF and USD/CHF have rebounded strongly in the last two days after both posted new record lows on Monday morning. The prospect of further delays in both EZ negotiations regarding a 2nd Greek bailout and in US debt ceiling talks was the driver behind the surge of CHF buying. Now that some hope has returned to both sets of talks, we are seeing CHF short covering emerging. Both EUR/CHF and USD/CHF have fallen a long way so if serious short-covering happens, we will see big rallies in both pairs.

• EUR/CHF: I’d play 1.1500/1.1750 range in the short-term and the next big move will depend on the outcomes of the talks
• USD/CHF: Short term range looks like .82/.83

Looks like this could be the critical week for both big economic regions with Thursday’s EZ meeting and the on-going US debt ceiling talks looking like they may provide some positive outcomes. The CHF has given back some of its recent gains and precious metals also fell quite heavily, late in the NY session.

The economic calendar is looking quite bare for the Asian session so we’ll need to watch the newswires for sentiment-affecting headlines.

Good luck today.

For more than a day , we’ve been rallying sharply in EUR/CHF, mostly on the back of a potential deal between Germany ans Switzerland for German account holders to pay tax on their accounts. The bounce was approximately 2.75 centimes in a little over a day. We’re now seeing a pullback from short-term overbought levels and a fairly clear bearish divergence. Support is not seen until down at the 1.1595/00 near-term.

Bloomberg  article

This story is said to be lending the EUR/CHF cross some support this morning. Presently up at 1.1610 from 1.1550 when I sat down.

The gap lower from Friday’s close at 1.1550 to stop-loss levels below 1.1400 has now been closed with the market back trading near 1.1550.

Not sure why, but it ain’t an obvious intervention…EUR/CHF up toward 1.1500 despite sky-high sovereign jitters in Euroland…

No mention of SNB intervention.

Lets be honest if they’d been seen intervening we’d be a lot higher now.

Cross sits at 1.1470 from around 1.1430 when I sat down.

Talk German bank notable buyer in recent trade. Maybe a bit of profit taking, who knows.

Regional bourses are lower by just under 0.5% on average. Gold is trading at $1597/oz, having earlier seen record highs above $1599/oz. Oil is trading flat at $97.20 but some soft commodities like wheat and corn are over 1% lower.

EUR/USD bottomed out at 1.4059 earlier, helped by some significant bids in EUR/GBP, though most traders are expecting a retest of 1.4000 sometime later today, especially if more negative headlines regarding the ETA bank tests emerge. USD/JPY is unchanged on the session and the CHF has been dominated by one of the bigger Swiss players, who obviously held all the orders and all the cards today.

EUR/USD and EUR/CHF have both rallied immediately on the open of the retail market. Traders seem keen to buy the dip in the hope of the opening gap in the cross, back towards 1.1530, getting closed.

I don’t have any firm information yet on what is driving the CHF but the main reason, as always at this time of the day/week, will be stop losses. USD/CHF has traded to a new record low at .8070, likely triggering stops below .8080 in the process, and of course EUR/CHF has also gapped through a previous low.

• The US debt ceiling talks still haven’t been resolved
• EZ leaders seem unable to settle on one approach to the Greek debt crisis with weekend interviews by Merkel and Trichet seemingly muddying the waters rather than providing any clarity

These as before will be the main factors influencing CHF sentiment

It looks like we are entering a time of extreme volatility where there will be plentiful trading opportunities but also lots of danger around every corner

• It’s going to be very risky to be long USD whilst the threat of a ratings downgrade hangs over the US. The impact on the Treasury market cannot be underestimated so USD bulls (or bottom pickers like myself) need to be very careful
• It’s also going to be very risky to be long EUR. The Italian debt situation is a very serious one indeed as their debt levels are quite astronomical for an economy which has grown at around 1.5% on average for the last 10 years. This could be the straw which knocks over the EU house of cards (if you’ll pardon the appalling mixed metaphors)
• Look at the NZD, look at the CHF, look at Gold; all screaming at us that the market is desperate for something ‘safe’ to buy

Conclusion: Be careful. I think we are going to see the unexpected and the Black Swan hasn’t even shown up yet!!

EUR/CHF has been up and down between 1.1500/50 and USD/CHF between .8100/30. The barrier at 1.1500 was breached, with 1.1496 the low I’m hearing. The lack of downside follow through suggests to me that the sole target was the barrier and now that it’s been done, the market relaxes a bit.

Stops reported below 78.50 in USD/JPY .

NZD/USD has posted new multi-decade highs above .8400

Not sure if it’s been breached as I’m hearing 1.1500 was the actual low.

The EUR is in a world of pain at the moment, falling heavily across the board. This bear trend doesn’t look like ending just yet so selling rallies in EUR/USD is the most obvious strategy. Last night the pair bottomed out at 1.3835 before rallying strongly to 1.4050 on short covering. A break back above 1.4070 might indicate a short-term base for the bear trend, but in the meantime take advantage of 200 pip rallies to set fresh shorts and don’t forget to book profits on those dips. Put opinions and emotions aside, these are great markets for trading in.

Nasty gap lower in EUR/USD after stops triggered.

EUR/GBP also lower as cable support holds. EUR/CHF makes new record low and EUR/JPY also gaps lower.

Nothing ground-breaking in any of the statements but the short-term speculative market is probably short EUR, especially on the crosses, so its no surprise to see some slight rally.

What was interesting to me was the ECB statement that selective default should be avoided.

Next hourly resistance in EUR/USD is around 1.4090.

The bearish EUR sentiment which started to take hold yesterday morning has continued through both London and NY sessions. EUR/JPY was a big loser with very heavy turnover reported and all of the EUR crosses were harshly treated. It will be interesting to see if some semi-official intervention appears in USD/JPY as we near 80.00 again.

Should be an interesting day. Good luck.

..In a scramble to safety

Gold hits a new all time high against the Euro at 1103; and on the day against the dollar at 1551

The poor jobs data from Friday and the on-going debt-ceiling debate are leaving the USD without too many friends in the FX market. It is being shaded just slightly by the EUR in the ongoing ‘ugly’ contest but traders shorting the EUR are more comfortable holding CHF, JPY, GBP etc than they are holding the greenback.

EUR/USD is finding some support around 1.4200 and dealers are also closely watching very important support levels around 1.4150.

• My initial reaction was that any default by Greece might swing the debate in front of the German constitutional court in favour of the anti-bailout lobby
• The French plan for rolling over bank debt might no longer be needed
• Like many before them, accepting that they cannot repay all their debt and going into default might be the only viable long-term solution open to Greece
• One thing for sure, it gives rise to a period of uncertainty

The market will flip-flop from EUR-bearish to EUR-neutral but surely any talk of a default must be short-term bearish for many of the EUR crosses with mainstream pairs like EUR/CHF leading the way but also slightly more exotic options like EUR/NZD and EUR/CAD having an impact. It might well be a case of sell the rumour buy the fact but we can definitely expect increased volatility.

That’s the headline from this FT article which says that EU leaders are now willing to accept that Greece will default on some of its bonds. This could have some ramifications for the hearings at the German constitutional court in Karlsruhe.

The EUR is heavy across the board this morning, just slightly off session lows against the USD at 1.4200.

EUR/USD has seen some volatility already in early interbank trade, currently trading around 1.4240 after seeing an early 1.4230/90 range. There were no major news developments over the weekend but pairs like EUR/CHF and EUR/GBP were very volatile on Friday in NY and this action looks to be continuing.

The AUD/USD has slipped a little to 1.0725 from its NY close after the Chinese CPI data and the launch of the Australian carbon tax.

Good luck today.

Cititechs had been short EUR/CHF but booked a 300 pip profit yesterday and now their tactical team have gone long EUR/CHF. These tactical decisions are usually based on good market information.

JP Morgan also recommended a short EUR/CHF technical trade earlier this week but one of the ‘cleverer’ hedge funds had been short EUR/CHF and booked a very nice profit. Now one of the bigger Swiss players has recommended a reduction in USD/CHF shorts.

I can’t see any technical reasons behind these calls but perhaps they know something which we don’t yet know.

They sold late last week just below 1.2300 and booked a 300 pip profit overnight. Everyone seems to be making hay with the EUR/CHF sell-rally strategy; I should have listened closer.

1.1965 has been tested and that is likely the last line of defense before a test of the all time lows just above 1.1800.

EUR/CHF has u-turned again from last week’s rally to 1.2345 from 1.1805 with the cross homing in on the 61.8 fibonacci retracement around 1.2010 as the safe-haven play builds again .

A close below here leaves the door open to revisit the recent all time lows again

Spot’s around 1.2035

• Starting to see signs of cooling in some export sectors, strong margin pressures due to strong SFR
• Aware that if current situation remains it will have a negative impact on the economy
• Trusts the SNB to take the right measures to guarantee price stability
• SNB has sole responsibility for monetary policy and exhange rate policy
• Rejects measures such as negative interest rates, a temporary lowering of VAT for hotel, export industry

..In a scramble to safety

Gold hits a new all time high against the Euro at 1103; and on the day against the dollar at 1551

The poor jobs data from Friday and the on-going debt-ceiling debate are leaving the USD without too many friends in the FX market. It is being shaded just slightly by the EUR in the ongoing ‘ugly’ contest but traders shorting the EUR are more comfortable holding CHF, JPY, GBP etc than they are holding the greenback.

EUR/USD is finding some support around 1.4200 and dealers are also closely watching very important support levels around 1.4150.

• My initial reaction was that any default by Greece might swing the debate in front of the German constitutional court in favour of the anti-bailout lobby
• The French plan for rolling over bank debt might no longer be needed
• Like many before them, accepting that they cannot repay all their debt and going into default might be the only viable long-term solution open to Greece
• One thing for sure, it gives rise to a period of uncertainty

The market will flip-flop from EUR-bearish to EUR-neutral but surely any talk of a default must be short-term bearish for many of the EUR crosses with mainstream pairs like EUR/CHF leading the way but also slightly more exotic options like EUR/NZD and EUR/CAD having an impact. It might well be a case of sell the rumour buy the fact but we can definitely expect increased volatility.

That’s the headline from this FT article which says that EU leaders are now willing to accept that Greece will default on some of its bonds. This could have some ramifications for the hearings at the German constitutional court in Karlsruhe.

The EUR is heavy across the board this morning, just slightly off session lows against the USD at 1.4200.

EUR/USD has seen some volatility already in early interbank trade, currently trading around 1.4240 after seeing an early 1.4230/90 range. There were no major news developments over the weekend but pairs like EUR/CHF and EUR/GBP were very volatile on Friday in NY and this action looks to be continuing.

The AUD/USD has slipped a little to 1.0725 from its NY close after the Chinese CPI data and the launch of the Australian carbon tax.

Good luck today.

Cititechs had been short EUR/CHF but booked a 300 pip profit yesterday and now their tactical team have gone long EUR/CHF. These tactical decisions are usually based on good market information.

JP Morgan also recommended a short EUR/CHF technical trade earlier this week but one of the ‘cleverer’ hedge funds had been short EUR/CHF and booked a very nice profit. Now one of the bigger Swiss players has recommended a reduction in USD/CHF shorts.

I can’t see any technical reasons behind these calls but perhaps they know something which we don’t yet know.

They sold late last week just below 1.2300 and booked a 300 pip profit overnight. Everyone seems to be making hay with the EUR/CHF sell-rally strategy; I should have listened closer.

1.1965 has been tested and that is likely the last line of defense before a test of the all time lows just above 1.1800.

EUR/CHF has u-turned again from last week’s rally to 1.2345 from 1.1805 with the cross homing in on the 61.8 fibonacci retracement around 1.2010 as the safe-haven play builds again .

A close below here leaves the door open to revisit the recent all time lows again

Spot’s around 1.2035

• Starting to see signs of cooling in some export sectors, strong margin pressures due to strong SFR
• Aware that if current situation remains it will have a negative impact on the economy
• Trusts the SNB to take the right measures to guarantee price stability
• SNB has sole responsibility for monetary policy and exhange rate policy
• Rejects measures such as negative interest rates, a temporary lowering of VAT for hotel, export industry

I must say I personally prefer the hedge fund trader strategy of ripping an easy 200 pips out of it rather than trying to pick a direction.

Last week CitiTechs went short EUR/CHF just below 1.2300 and now another big US bank is recommending the short trade. They are looking for a minimum move to 1.16 with a possible move to 1.10. They both recommend having stops on the trade above 1.2500 and that’s a bit too far away for my liking.

Just reading a note from one of the bigger prime brokers saying that one of their smarter accounts sold 200 million EUR/CHF around 1.2330 on Monday and has now booked an easy CHF4 million profit, buying them back in the last few hours.

I think that’s the sort of market we are in; sit and wait for good risk reward opportunities and then book your profits when given the chance and go look for the next opportunity. I think entrenched views can be dangerous in these types of markets.

The EUR has continued on with the slide which began in Asia yesterday and the slashing of Portugal’s credit rating gave the downmove some more impetus. EUR/CHF again led the way on the crosses.

No important economic data releases today in Asian trade.

Good luck today

EUR/CHF and USD/CHF driven lower on widening peripheral Eurozone spreads, following the weaker EU data.

Early trigger was some sharp selling in GBP/CHF from a major swiss name, with Cable bearing the brunt initially.

EUR/CHF tripped some stops down through 1.2250 to the recent lows around 1.2216 with talk of stops now set on a break of 1.2200

Heavy sell orders just below 1.2350 look to have taken their toll and with such a dominant bear trend in play, bears are jumping back on the EUR/CHF bandwagon.

Risk-aversion, Chinese interest rate rumours, the German constitutional challenge to the bail-outs; all of the above are having an impact.

• EUR/CHF: Sell orders ahead of 1.2350 with sizeable stops above
• EUR/JPY: Large stops reported above 118.00
• EUR/GBP: Option barrier at .9100

Some assorted flow stuff:

• Buy stops seen thru 1.2350 in EUR/CHF
• Large buy stops seen thru 118.00 in EUR/JPY
• Sell stops seen thru 80.50 and 80.25 in USD/JPY, buy stops thru 81.00 and 81.30
• Buy stops seen thru 1.0800 in AUD/USD
• Barrier option interest seen up at .9100 in EUR/GBP

No liquidity of any note this morning and as soon as the offers near 1.4550 were filled, there was no supply left to fill the stops just above. The market gapped to a high of 1.4577 thus far.

Keep an eye on EUR/CHF as there are sell orders reported ahead of 1.2350 with stops just above.

Sell orders were reported on Friday night ahead of 1.2350 with stop-loss buy orders directly above.

They’ve re-established short position in EUR/CHF at 1.2283.

Target 1.1600.  Stop 1.2425.

Wow, good risk reward.

That cross so much the vogue, is extending the unwinding from yesterday having broken through  daily trendline resistance at 1.2230.

Next level of interest should this move continue, is around 1.2350 , the 38.2% fibo retracement of the fall from 1.3244 to 1.1806  and close to  the 50 day MA towards 1.2360

Well below median forecast of 57.8.

Swissy little weaker in wake of numbers, EUR/CHF up at session high 1.2275.