EUR/CHF A history of interventions: November 2009

As I wrote yesterday, the market moves reminded me of 12 months ago when risk aversion was in full flow and this has continued throughout the European session. As Lilac mentioned after the FTSE fell by over 3%, we could be in for another Black Friday.

JPY crosses like the beloved AUD/JPY carry trade were smashed and I think that this is the beginning of a nasty move lower. The CHF crosses also fell and Gold maintained its gains. With liquidity now drying up, more big moves are very likely.

TGIF and be careful out there!

Just been liaising with a chum who knows a thing or two about forex.

And here’s what he had to say regarding SNB and intervention

• SNB was spotted buying USD/CHF at .9960 on EBS
• Talk interest still lined up now just below 1.0000
• SNB also seen buying EUR/CHF on EBS, level/s not forthcoming
• Not large amounts in either case
• No reports of SNB calling banks direct

Rumours sweeping market that SNB has intervened. USD/CHF and EUR/CHF have both spiked higher,  USD/CHF up at 1.0020 from an overnight low of .9919, while EUR/CHF is up at 1.5105 from an overnight low of 1.5008.

This is one market trend which is showing no sign of slowing down. The AUD and the EUR have been unable to keep pace today, both giving up ground across the board with the JPY and the CHF the big winners. This is exactly the sort of stuff we were writing last year when risk aversion was at its peak.

Once again, EUR/CHF has slipped back toward pivotal support in the 1.5075 area. We’ve not been more than a handful of pips below that level since the SNB began selling francs back in June. Yesterday I suggested selling a sell-stop in the 1.5040 area should downward momentum develop in EUR/CHF on the loss of 1.5070/75. I still like that play. The SNB hinted yesterday they are getting set to hit the exits “soon”.

USD/CHF has set new 2009 lows at 0.9962 thus far.

The aforementioned BIS purchases up at 1.0040/45 offered only fleeting support and we’re presently down at 1.0005.

Talk of some buy orders lined up down at 9995/1.0000.

Meanwhile there is also talk of the BIS checking prices in EUR/CHF, which is presently down at 1.5085.

Since the SNB announced it would intervene to weaken the franc in late June of this year, the cross has not been below the 1.5070/75 level. With today’s announcement from outgoing SNB president Roth that the policy will have to be reversed soon to preserve medium-term price stability, a run at the downside to test the SNB’s resolve makes perfect sense. The cross has fallen back below the 1.5100 level this afternoon.

Perhaps it makes sense to place a stop well below the range lows between 1.5070 and 75 in case the SNB pulls the plug on supporting the cross, say around 1.5040. We could see a quick return to pre-SNB levels around 1.4600. Put a stop above 1.5100. A decent risk/return, no?

EUR/CHF is trading a little firmer, presently at 1.5105 from a North American close Monday around 1.5085.

There seems to be a little caution ahead of a speech being given by SNB’s Roth at the press club in Geneva at 10:30 GMT.

Also earlier Swiss September retail sales showed a -1.6% y/y decline, which wasn’t very encouraging.

EUR/CHF sits at 1.5090, SNB intervention territory.

Just reading some analysis/commentary from a large Swiss bank, who say  ”We argue that the SNB is likely to let the intervention points drift lower.”

That’s as maybe, but personally wouldn’t like to bet on it!!

Some interesting talk regarding EUR/CHF cross. Apparently there has been decent buying of 2 week CHF 1.5000 euro puts.  Is the SNB going on holiday?

Cross solid as a rock today at 1.5105.

Economic uncertainties remain extremely high says SNB official Jordan and now is not the time to exit its loose monetary policy. The main indicator for exit is the bank’s inflation forecast.

The SNB’s intervention strategy has helped lower volatility in EUR/CHF and has kept the franc from rising versus the EUR. There is no credit crunch in the eurozone, Jordan says.

EUR/CHF holds just above the 1.5075 level where the SNB and its proxies have been steady buyers in recent months. Friday’s buying paid few long-term dividends, however, disappointing the bulls.

Swiss OctoberPMI has come in at 54.0, down from 54.3 in September and lower than the median forecast of 55.0.

Meanwhile EUR/CHF is down 1.5092. Any further slide could well elicit renewed intervention by the SNB in either USD/CHF or EUR/CHF, or both.  Personally, if I were them, I’d hold fire for now and let the market stretch itself a little further.