The rally on the Swiss charts almost looks like a bad data point but the surprise removal of an exchange rate cap with the Euro wasn’t anticipated. One would think the Swiss would have difficulty maintaining the current exchange rate, as the currency spent nearly a full year declining and the massive reduction in the Swiss exchange rate over the last year has been totally reversed in a matter of hours. While puts are expensive due to volatility, a 700 point rally should be difficult to hold, especially if the deflationary spiral mentality continues.
Technical Outlook: The market was pushed to a new contract low. Rising from oversold levels, daily momentum studies would support higher prices, especially on a close above resistance. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The daily closing price reversal up is a positive indicator that could support higher prices. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside objective is 99.24. The market is approaching oversold levels on an RSI
reading under 30. The next area of resistance is around 98.74 and 99.24, while 1st support hits today at 97.76 and below there at 97.27.