The Swiss has put together moderate gains this morning and is benefiting from carryover support out ofthe Euro zone, but a negative year-on-year reading for the Swiss Producer Price Index indicates that theirdomestic economic situation needs to see some notable improvement for prices to rise clear of their earlyNovember highs. The Swiss/Euro spread remains firmly planted just above the SNB’s 1.20 peg, leaving open thepossibility that weak Euro zone data tomorrow could trigger a fresh wave of intervention. With downside targetingaround the 1.0314 area, a move back towards the 1.0426 level later today should be viewed as a sellingopportunity.
Technical Outlook: Daily momentum studies are on the rise from low levels and should accelerate a movehigher on a push through the 1st swing resistance. The market’s close below the 9-day moving average is anindication the short-term trend remains negative. The daily closing price reversal down is a negative indicator forprices. It is a slightly negative indicator that the close was under the swing pivot. The near-term upside objectiveis at 104.18. The next area of resistance is around 103.78 and 104.18, while 1st support hits today at 103.16 andbelow there at 102.93.