EUR/CHF Markets Betting on Floor Hike: October 2011

EUR/CHF has been under pressure for the the last two weeks despite Herculean efforts by the EU/IMF to bailout the euro zone. It looks as if the market is taking up the SNB on its offer the buy unlimited quantities of EUR/CHF.

If the Swiss decide they are gonna defend the undefinable, you may as well take them up on the offer.

I still like buying EUR/CHF puts rather than selling pot EUR/CHF…Spend a little, win a lot, if Europe blows up…

Still rather sparse on the intel front this week, but what im hearing is ..

EUR/USD- Offers 1.4040/50, 1.4050 is a barrier with buy stops waiting on a break.  Bids are down at 1.3980.

USD/JPY- Bids 75.70/75 (possibly kampo) and sell stops on a break down through 75.70. Barriers below at 75.50, 75.25 and 75.00 with stops below each. Offers start from 76.30 up to  76.50. Buy stops above 76.65.

EUR/JPY- Tech resistance 106.50/55 (strong), suggested stops above. Bids 105.80/85 and 105.60/70

AUD/USD- offers 1.0630 with larger up at 1.0660/65.  Tech support  1.0500/10 and 1.0436 (100 day SMA)

EUR/GBP-  Tech resistance 0.8765/70, 0..8777(100 day SMA) , tech support 0.8690 and 0.8670

GBP/USD-  Tech resistance 1.6035 (100 day SMA  and Asia high). Tech support 1.5955, 1.5900

EUR/CHF- Barrier 1.2300

Big drumm roll…………………………………………..at 1.2300.

Personally I’d like to see that sucker popped bigtime. Just to make a certain someone look real silly

• EUR/JPY: Overall bearish but interim base in place at 100.80. Important short-term support at 104.75 and if that holds, possible to see test of strong daily resistance (38.2%, trendline, 100-day MA) near 109.50/75.
• EUR/CHF: Consolidation, play 1.20/1.25 range
• EUR/GBP: Bearish whilst below .8800 but expect heavy short-covering if breaks above
• EUR/AUD: 1.30/1.40 broad range trade, wait for edges before commiting large risk
• EUR/CAD: Wedge pattern on weekly chart suggests 1.32/1.44 edges

Whilst there’s not a lot going on…

EUR/USD-  Offers 1.3950/60, stops 1.3960/70, barrier 1.4000. Bids  and the 55 day MA at 1.3900 (also a sizeable opt expiry im told), tech support 1.3875 and 1.3850

GBP/USD-  Tech support 1.5975/80 and 1.5955/60.  Offers 1.6040/50(UK clearer)

EUR/JPY- Bids 105.45/44 and 105.00/10. Offers 106.00/10 and 106.30 and 106.50/60

USD/JPY- Bids 75.70 (Kampo) and ahead of 75.50, 75.25 and 75.00 barriers.  Stops on a break down through each. Offers  76.15/20 and 76.30/35

EUR/CHF- Offers 1.2230 (possible stops on a break higher), tech support 1.2170/75 and 1.2120/25

AUD/USD-  Bids 1.0335/40,  tech support 1.0315.  Offers/tech res 1.0395/00 (200 day MA at  1.0396) and 1.0435/40 (100 day MA at 1.0437)

Well if there was any doubt earlier, then there isn’t now.

Barrier option interest in EUR/CHF at 1.2200 is now history.

THE major Swiss commercial bank has been notable seller of USD/CHF in recent trade. We’re down at ..8740 from around .8780 when I sat down.

The cross is down at 1.2180.

But there has recently been talk of barrier option interest down at 1.2200 in EUR/CHF.  Recent lows have been 1.2203, we’re presently at 1.2220.

• Middle East and Asian Sovereigns again seen buying EUR/USD towards 1.3850
• Longs continue to bail out of EUR/CHF, no panic selling just gradual slide
• Unconfirmed report that Kampo is on bid in USD/JPY at 75.70

Looks like EUR/CHF just fell below the Oct. 20 low of 1.2207. The rush to Swiss francs tells me Europeans don’t have faith in euro zone leaders and/or EU banks.

• Ready to take further action on franc if warranted by outlook, deflationary pressure

EUR/CHF touch firmer in wake of comments, presently at 1.2270.

It was very interesting to read the insider hedge fund report on Thursday which said that the bigger speculative players were now flat on CHF positioning. The market doesn’t like to be flat, and we immediately saw a dive in the EUR/CHF. I’m still sure that the market would much prefer to be long CHF than long EUR, so the only reason for being long EUR/CHF is in expectation of more SNB action. If the SNB does nothing, this pair will test bull patience by drifting back towards the pivotal 1.2000 level.

As we know from past experience, drawing a line in the sand is a dangerous game in the FX world, and the market’s natural reaction is to try and break the line. We should expect some more volatility in EUR/CHF over the coming weeks.

Getting told of some reasonable offers 1.2300/10 here from swiss names and a US investment house, but buyers have been strong as well with a UK clearer behind the fresh move higher.

I’m off in a sec so have a lovely weekend and I’ll hand you over to Jaime.

Best of luck this afternoon

Looks like nothing more than a short squeeze after the Far east triggered a stop sell fest  down through 1.2300 and through 0.8900 in USD/CHF. |

I ‘ve asked around and there has been some buying in the swaps from a German name and this has led punters to believe SNB could be behind it.

EUR/CHF back at 1.2300 now and USD/CHFis up at 0.8926

There’s a large 1.2200 expiry today for the NY cut at 1400GMT, which barring some surprises from the SNB could attract nearer the time.

EUR/CHF is at  1.2247

That mob are  behind the early fall from 1.2260 to 1.2214 just now. Should be some support around 1.2200 and 1.2160, resistance up around  1.2275/85 initially.

Looks like stops triggered in both USD/CHF and EUR/CHF, with the latter falling 100 pips in a matter of a few minutes. Not hearing any news from the usual channels so that’s why I’m blaming stops. (Good cut in the AUD/CHF I hear you say  )

Fall in EUR over summit postponement fears has set EUR/CHF hitting the skids with a  plunge down through the 14 day and  200 day MA around 1.2337 /1.2328 and support at 1.2300, to lows of 1.2280

We’re back around 1.2300 now

Down through 1.2380 i’m told

Swiss recovery slows as exports fall in Q3.  Roughly half of analysts now see the SNB moving the EUR/CHF peg higher, saying the peg has had a stabilising effect, but is  still too low. Around 60% however believe the swiss economy will avoid a recession

EUR/CHF’s sits around 1.2395

Despite the reported BIS offer at 1.3820 , middle eastern EUR/USD buying is  still in evidence and EUR/CHF buying is adding to the topside pressure .  Asian sovereigns however have been noted sellers towards the earlier highs of 1.3740

Fears of a peg hike in EUR/CHF are getting a bigger airing which is driving the cross up to fresh 5 month highs around 1.2450.

As mentioned yesterday there have been calls from trade unions in Switzerland to hike the peg to avoid a downturn in the swiss economy and  threats to employment.

Markets are  attempting a clear break through that 1.2435 level I mentioned earlier and a close above there tonight should signal further gains up towards 1.2600

UPDATE: Now hearing EUR/CHF buying  was a UK clearer on behalf of a fund

Ahead of the regular SNB meeting, a lot of talk carrying on from yesterday of a rise in the EUR/CHF floor.

The cross leapt from 1.2380 to 1.2419, in nervous thin trading . Traders seeing a  break of the 1.2435 level as a catalyst  to 1,2490/00 and 1.2600

Haven’t heard of any offers as such but will keep you informed of any i hear.

EUR/CHF’s sits   at 1.2407

Follows on from the Swiss Secretariat’s comment the other week.

The latest call from SGB Union president Paul Rechsteiner made today, in a bid to stave off recession in Switzerland,  sighting threats of rising unemployment

EUR/CHF’s  sits around 1.2343

EUR/USD – Bids 1.3705/10,  1.3690/95, and 1.3565. Offers 1.3765/75 and 1.3820/25

GBP/USD-  Bids 1.5660/70

EUR/GBP- Bids 0.8735/40. Offers 0.8780/85

USD/JPY- Bids 76.60/70, offers 77.20/25, 77.50 and 77.85

EUR/JPY- Bids 105.00, offers 106.55/60, 107.00/05

AUD/USD- Bids  1.0130, offers 1.0225/30 and 1.0175/80, possible stops through 1.0235/40

EUR/CHF- Support 1.2320/25, offers 1.2430/35, major resistance at 1.2490/00

EUR/USD-  Bids 1.3570/75 and 1.3550/55, offers 1.3640/45 and 1.3685/90, stops through 1.3700 (barrier reputedly large)

USD/JPY- Bids 76.50/55, 76.10, 75.95. Stops down through 75.90 and 75.75 and 75.50,(75.75 and 75.50 are both option barriers). offers from 77.00 up to 77.30 with stops up through 77.35

EUR/JPY- Offers 104.80, and 105.00, stops above. Bids 104.00/10

GBP/USD- Offers 1.5685/90, bids at 1.5600/10 and 1.5585/90

AUD/USD- Tech support 0.9880/90, offers 0.9970/80 and 1.0000/10

EUR/CHF- Tech resistance 1.2435, bids 1.2300/05

Being told  should be fairly solid . EUR/CHF just been down to 1.2317 (Asia low 1.2315) and currently around 1.2325

Gerry mentioned this level (1.2340) but we’ve now touched as low as 1.2303. JPMorgan is just out with a note saying they expect the SNB to hike the peg to 1.3000. I’ve been long since 1.2050 and I’m staying long but it’s tough to be a buyer here. Better to buy on a broad EUR sell off.

Certainly a lot more volatility overnight than we ‘enjoyed’ yesterday during Asia so hopefully some of that washes over into our session. EUR made solid gains against all of the majors, especially against the GBP, and the AUD also benefitted from the increased risk appetite.

BOJ today and NFP later tonight are the two main risk events. USD/JPY dealers will be on heightened intervention watch.

Good luck today and TGIF.

Apparently old range lows at  1.2435 represents strong resistance on EUR/CHF ahead of the 60 week average, which has capped trading for the last 3 years… so a friend with long reaching charts tells me ?

NB. 200 day MA is at 1.2339 which the market hasn’t closed above since April

Corporate buyers reportedly led a tear higher to 1.2430, following comments from the Swiss State Secretariat earlier.

The cross has since eased back around 1.2365… crazy stuff….

UPDATE: My spies now tell me a barrier at 1.2400 was flushed out on that spike

Swiss press are reporting that  Marie- Gabrielle Ineichen-Fleisch, Swiss State secretariat  for econ Affairs has said the Swiss franc should be capped at 1.30 or 1.40  against the EUR rather than the present 1.20, as this would better represent purchasing power-  Tages- Anzeiger reports

EUR/CHF is sitting around 1.2325

The sell orders in EUR/USD that we’ve been mentioning just shy of 1.3400 are holding the retracement rally for now and should continue to do so ahead of the ECB, at least during Asian trade. I’m sure there will be plenty of trailing stops above there which could come in for some attention during the European session.

Demand for EUR/CHF remains strong with lots of noise in the market re further SNB action and the AUD/USD has also made a nice recovery after technical support at .9400 held the first attempt.

Good luck today.

London’s financial bookmakers have the main bourses in Germany, France and the UK opening around 1.5% higher on average. That should give extra bullish impetus to risk pairs like EUR/CHF and/or AUD/JPY.

Noise is getting louder in the EUR/CHF market that the SNB will again raise the floor to at least 1.25 if not 1.30. Traders have been busy over the last 24 hours buying out-of-the-money calls just in case.

Looks like the SNB continues to try and keep the specs at bay, setting a line in the sand around 1.2125 level. If specs successfully overwhelm the SNB, look for confidence to grow and a severe test of the 1.2100 “cap” to unfold this week.

EUR/USD has bounced sharply from its probe below 1.3200, reaching 1.3235 so far.