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2 Oct 2013
EUR/CHF confined; will Draghi drop the usual verbal “bombshell”?
FXstreet.com (Athens) – The EUR/CHF is trading slightly downwards in the mid European trading session ahead of ECB minutes and amidst Italian political jitters.
EUR/CHF sits on the fence as Mario usually has the habit of dropping the odd verbal bombshell
The EUR/CHF has been trading steadily downwards since the opening of the Asian trading session due to the risk-off sentiment, which is generally inspired by the Italian political turmoil, the US default on its own as well as on the yesterday’s disappointing EZ data. Regarding yesterday’s EZ data we should point out that as far as unemployment hurts even the power horse of Euro land, i.e. Germany as well depicted on Tuesday, Draghi’s comments made on August become more vivid and realistic, as well. We should remind that the President of ECB had pointed out that “the decline in Euro zone excess reserves”. Therefore, we are probably ahead of another round of LTRO which in any case would be EUR-negative similar to December 2011 and February 2012.
Technical Outlook on EUR/CHF
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “has held the initial test
of the 1.2217 June low. Rallies are now expected to find initial resistance offered by the 1.2266
August low and remain capped by the 1.2307 200 day ma. Note only above 1.2315 will alleviate
immediate downside pressure. Intraday charts are suggesting this rebound should terminate
circa 1.2280.This has left the market vulnerable on the downside to
further losses and it targets 1.2135/32, the April lows.”
EUR/CHF sits on the fence as Mario usually has the habit of dropping the odd verbal bombshell
The EUR/CHF has been trading steadily downwards since the opening of the Asian trading session due to the risk-off sentiment, which is generally inspired by the Italian political turmoil, the US default on its own as well as on the yesterday’s disappointing EZ data. Regarding yesterday’s EZ data we should point out that as far as unemployment hurts even the power horse of Euro land, i.e. Germany as well depicted on Tuesday, Draghi’s comments made on August become more vivid and realistic, as well. We should remind that the President of ECB had pointed out that “the decline in Euro zone excess reserves”. Therefore, we are probably ahead of another round of LTRO which in any case would be EUR-negative similar to December 2011 and February 2012.
Technical Outlook on EUR/CHF
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “has held the initial test
of the 1.2217 June low. Rallies are now expected to find initial resistance offered by the 1.2266
August low and remain capped by the 1.2307 200 day ma. Note only above 1.2315 will alleviate
immediate downside pressure. Intraday charts are suggesting this rebound should terminate
circa 1.2280.This has left the market vulnerable on the downside to
further losses and it targets 1.2135/32, the April lows.”