EUR/CHF up 40 pips from the lows
Selling EUR/CHF early in European trade has switched into a wave of buying. The pair fell as low as 1.0797 but is now trading at a session high of 1.0844 as it rises above the Asian high.
The next level to watch is yesterday's high at 1.0852.
All the talk ahead of the ECB suggests the possibility of dovish rhetoric and that could weigh on the pair. That's balanced by the possibility of intervention from the SNB and/or countervailing actions by the SNB.
Technically, the ECB decision has clearly weighed on the pair. On Friday it touched a one-month low at 1.0780 and has been slow to bounce back. A rally from July into September appears to have stalled and a series of lower highs is on the chart.
Despite the pop today, I see a sluggish bounce and lack of enthusiasm from the bulls. On the downside, I target at decline to the confluence of support near 1.07.
That's a reasonable enough decline that it won't set off alarm bells at the SNB, especially if it's driven by a dovish tilt from Draghi.
The ECB decision is on Thursday.