It was nice to wake up and see the 1.2280 level taken out as it’s been such a strong technical level for both ways for a long period of time. As Mike pointed out earlier the 200 dma was taking heat and we’re still trying to get over it. The 55 and 100 dma were cast aside fairly easily but the more important hurdle to overcome is the July 2013 resistance line which has kept the lid on the upside four times since July.
EUR/CHF daily chart 02 01 2014
The level comes in at 1.2319 today and should we break it then we could see us getting back into the 1.23-1.24 range again.
I’ll want to see how we do when we return to a full market scenario next Monday but on the face of it the willingness of buyers today is encouraging. It could well be that alongside the ECB/SNB interest rate and inflation trading we had previously, that saw the falls to the lows at 1.2160, we might have also seen some early year end profit taking from the mass of longs. Remember that the majority of the market is long EUR/CHF and trading the peg. I may be picking a reason from the tree but as nothing has fundamentally changed it stands to reason that traders may be re-establishing trades for the New Year.
