EUR/CHF: A History of Interventions, April 2010

• AUD/USD: stops below .9135 and again below .9070
• USD/JPY: solid bids 92.70, stops below 92.40, heavy semi-official bids expected at 91.50 ( I’m hearing of “massive” stops below 90.50 so if market gets on a roll lower keep this level in mind)
• EUR/USD: looks like the order books are cleaned out. Light sell orders starting at 1.3200, not much in way of bids until approach to 1.3000.
• EUR/CHF: SNB reportedly buying at 1.4320
• EUR/GBP: heavy bids .8590/.8600, stops below also heavy

Just hearing SNB still around in EUR/CHF. 1.4320/25 levels cited.

JUst been told Swiss National bank on the bid at 1.4325.

Just a reminder for all you Swissy traders out there that the SNB is reportedly, and has been for some time, buying EUR/CHF around the 1.4330 level.

Presently at 1.4358.  Guess earlier reports of SNB on the bid down at 1.4320/30 were on the money.

Getting confirmation SNB on bid down at 1.4320/30 in the cross.

Obviously something significant happening at this level with the market unable to break below here all week. On the other hand one can also say that bounces have been anaemic. Many traders have given up trading this pair as it hardly moves for weeks on end and then spikes violently in either direction.

Traders report hearing a pair of interest rate rumors making the rounds. On is that the SNB is preparing to raise rates (which likely goes back to that earlier report of the SNB being able to tolerate EUR/CHF down to 1.4000). The other is that regional Fed presidents are pushing for another discount rate hike…we’ve been over that one…It won’t matter when they do.

EUR/USD has fallen as low as 1.3552 and trades now at 1.3565.

Despite recent spurts of SNB intervention, a hedge fund advisory firm says that the SNB can tolerate the EUR/CHF rate as low as 1.4000. The cross has taken a hit on the report and trades now at 1.4372, down from 1.4394 30 minutes ago.

1.4320 has been the latest “line in the sand” from the SNB…

Very little dip in the cross so far today after the big gap higher on the open. All of the EUR crosses are getting the same short-covering treatment with EUR/CHF also making solid gains. I don’t think the EUR is out of the woods by any stretch of the imagination but I do think that this short-covering rally has the potential to run for a few days.

After sitting on the bid around the 1.4320 level all weak, the Swiss National Bank paid a few offers and drove EUR/CHF up to 1.4354, briefly. We trade now at 1.4332.

Will this cross ever move again I hear you ask.  Who cares is my reply. No mustn’t be frivilous, I’ll get told off.

Just been reading some comments on Reuters regarding the cross.

Credit Suisse analysts apparently think the cross will trend lower over a one-month horizon to their 1.4200 target.

Meanwhile a UBS analyst opines that “On Swiss domestic grounds there is limited room for a materially higher euro/swiss franc and then there are the ongoing discussions across Europe on Greece.”

EUR/CHF sits demurely at 1.4321.

The EUR/USD is stuck around its session lows at 1.3425 as the market finds it difficult to find any reasons to buy the single currency. Next support is at 1.3390. On the slightly positive side, EUR/GBP and EUR/CHF are holding up at the moment so it’s not only the EUR which is on its lows. Technical support in the cable is at 1.5180.

I mentioned last week that the big Swiss banks ‘expected’ the SNB to intervene in the EUR/CHF around 1.4200. Little wonder that the big banks make such massive profits out of Foreign Exchange. Sure enough on Friday night the SNB came in and spooked the market higher from 1.4150 to 1.4400 before it settled back down again. I’m hearing from the same Swiss banks that the SNB is serious about smoothing out EUR/CHF falls, whatever that may mean.

My guess is no. Now that they have finally smoked SNB, my guess is that shorts in EUR/CHF will take the hint and head to the sidelines, if they have not already. Buy-the-dips will be the new battle cry, I’d imagine, especially with focus shifting away from Greece, at least for the moment, reducing safe-haven demand.

UPDATE: Reuters reports the SNB refuses comment on forex movements…

1.4144 is the SNB’s definition of “excessive” CHF strength, it would appear. The cross is rocketing, now at 1.4328 after the bank stepped into to buy for the first time in weeks.

Once again they wait for a thin pre-holiday market to maximize their bank for the buck…

No signs yet that the SNB intends to back up its words with deeds.

EUR/CHF has fallen to the 1.4150s after earlier triggering a barrier at the 1.4200 level. The franc is at record levels against the euro but the SNB has yet to backup recent pronouncements on preventing “excessive” CHF strength. Looks like the market will continue to buy CHF until they can smoke them out…

EUR/CHF has continued lower, blowing up 1.4200 barrier. Presently at 1.4185 as stops tripped below 1.4200 with the SNB continuing to stay at home.