19 Jan 2015
EUR/CHF climbs to 1.0150
FXStreet (Edinburgh) - The Swiss franc is losing ground vs. its European counterpart at the beginning of the week, lifting EUR/CHF to test session highs around 1.0150.
EUR/CHF in search of a ‘fair value’
Market participants are still trying to figure out the ‘fair value’ for the Swiss franc after more than three years of being captive by the SNB’s peg to the euro. The cross managed to leave session lows in sub-0.9900 levels overnight to situate in the mid-1.0100s so far, benefiting from the risk-on sentiment prevailing in the markets. While the recent move from the SNB is still well present in the broader markets, the next risk event for the cross will be the crucial ECB gathering on Thursday, with the probable announcement of a QE programme by the central bank.
In light of this high-risk event, analysts at TD Securities commented, “With the ECB likely to introduce sovereign QE…EUR depreciation is likely to continue, which means EURCHF is likely to remain under further pressure to depreciate”.
EUR/CHF relevant levels
The cross is now advancing 2.12% at 1.0120 with the next resistance at 1.0250 (hourly high Jan.16) followed by 1.0651 (high Jan.15) and then 1.1000 (psychological level). On the other hand, a breakdown of psychological levels at 0.9900 and 0.99800 would expose 0.9751 (low Jan.16).
EUR/CHF in search of a ‘fair value’
Market participants are still trying to figure out the ‘fair value’ for the Swiss franc after more than three years of being captive by the SNB’s peg to the euro. The cross managed to leave session lows in sub-0.9900 levels overnight to situate in the mid-1.0100s so far, benefiting from the risk-on sentiment prevailing in the markets. While the recent move from the SNB is still well present in the broader markets, the next risk event for the cross will be the crucial ECB gathering on Thursday, with the probable announcement of a QE programme by the central bank.
In light of this high-risk event, analysts at TD Securities commented, “With the ECB likely to introduce sovereign QE…EUR depreciation is likely to continue, which means EURCHF is likely to remain under further pressure to depreciate”.
EUR/CHF relevant levels
The cross is now advancing 2.12% at 1.0120 with the next resistance at 1.0250 (hourly high Jan.16) followed by 1.0651 (high Jan.15) and then 1.1000 (psychological level). On the other hand, a breakdown of psychological levels at 0.9900 and 0.99800 would expose 0.9751 (low Jan.16).