By: Mike Kulej
The EUR-CHF pair has been making news lately. The most obvious reason is the market preoccupation with the Euro and its fall from glory. Not every player is happy with this turn of affairs. One of those market participants is the Swiss National Bank. The SNB watches this pair very closely, since most of this country trade is done with the EU.
They see too weak Euro as a threat to the recovery of Swiss economy and have taken steps to prevent it. The national bank has intervened few times in the past, most recently at the 1.4000 level. In spite of the SNB involvement, market forces keep pushing the EUR-CHF lower. Currently this pair is in the middle of the most recent trading range and bound to make a short-term move either way.
With the technicals largely neutral in the short term, the price action itself should determine which way to trade. A move above 1.4300 could see the market got to 1.4400. On the other hand, breaking of the 1.4200 level might continue the swing to 1.4100. Anything under 1.4100 might trigger a response from the SNB and should be treated carefully.