Although the market avoided a key reversal on Friday and is finding modest strength early this week,there is a stronger sense that last Friday’s high may be the “high water mark” for the Swiss Franc going forward. SNB officials have made no secret of their concern over the Swiss Franc’s high valuation, and have plenty of workahead in order to improve on Swiss inflation levels. The March Swiss may climb up towards the 112.52 level, andshould maintain a positive tone during the balance of today’s trading.
Technical Outlook: The rally brought the market to a new contract high. Stochastics trending lower atmidrange will tend to reinforce a move lower especially if support levels are taken out. The market now above the18-day moving average suggests the intermediate-term trend has turned up. Since the close was above the 2ndswing resistance number, the market’s posture is bullish and could see more upside follow-through early in thesession. The next downside objective is now at 110.33. The next area of resistance is around 113.30 and 114.58,while 1st support hits today at 111.18 and below there at 110.33.