A fresh surge of flight-to-safety flows has helped the Swiss Franc recover a large portion of its overnightlosses, but the inability to climb past Tuesday’s 171/2-month high may indicate that safe-haven support alone maynot be enough to keep prices well supported at these lofty prices levels. Very low Swiss inflation levels continue to shadow the Swiss Franc, and the SNB have already shown that they have little tolerance for a high valuation fortheir currency. The December Swiss may pull back towards the 111.58 level later today, but should find morethan enough benefit from today’s “risk off” mood to remain fairly well supported over the near-term.
Technical Outlook
CHF (DEC): The market made a new contract high on the rally. Rising stochastics at overboughtlevels warrant some caution for bulls. The close above the 9-day moving average is a positive short-term indicatorfor trend. The market’s close above the 2nd swing resistance number is a bullish indication. The next upsidetarget is 112.78. The market is becoming somewhat overbought now that the RSI is over 70. The next area ofresistance is around 112.43 and 112.78, while 1st support hits today at 111.21 and below there at 110.33.