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SNB Rate Decision And Comment On The CHF Sends USD/CHF And EUR/CHF Higher Initially
By Greg Michalowski on September 17, 2009 | More Posts By Greg Michalowski | Forex News By FXDD
The SNB says they will continue to firmly counter the Franc appreciation. They will also look to continue to buy bonds if neccesary.
Other comments
- SEES 2010 INFLATION AT 0.6% VS PREVIOUS 0.4%
- SWISS ECONOMY MAY SHRINK 1.5% TO 2.0% IN 2009
- CONSUMER PRICES TO DROP 0.5% IN 2009
- TO CONTINUE TO SUPPLY ECONOMY WITH AMPLE LIQUIDITY
- UNCERTAINTIES REMAIN
- IT WILL CONTINUE MONETARY POLICY
- SOME ENCOURAGING ECONOMIC SIGNS
The mention of the value of the CHF by the SNB in their interest rate decision release has led to a move higher in the USDCHF - initially at least. The pair moved to test the 100 hour moving average at the 1.0352 level, reaching a high of 1.0357, but fell short of the 1.0368 level which is the low price from December 29, 2008. This level was broken last Thursday for the first time. The last two days the price has not been able to trade above this key level. A move above it today, will likely lead to continued short covering buying.
On the downside, the close yesterday was 1.0319 and right below that is additionals support at the 1.0315 level. Watch this level. A break may be a test by the market to test the SNB resolve to sell the currency (buy USDCHF). I would be cautious from the short side, in the face of the comment this morning - just out of fear of intervention.
The EURCHF also moved higher on the announcement. The price moved above the 200 bar moving average on the 4 hour chart and looked to test the midpoint of the recent move lower from the August 10th high to the low reached on September 14th. The midpoint comes in at the 1.5236 level. The high reached 1.5230.
The price is back down and looks to test support at the 1.5170 where lows from today ant the 50% retracement of the move up from the lows is found. Below that is key support at the 1.5154 to 1.5158 level where the 200 and 100 hour moving averages are located. I would expect buyers against the level.
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