The December Swiss built onto yesterday’s sizable gains and climbed above the 110.00 level for the first time since February, but the Swiss is having trouble holding early strength and may be vulnerable to a sizable pullback over the balance of this week’s trading. The SNB reaffirmed their 1.20 floor rate with the Euro at their monetary policy meeting today and threatened to take further measures “if required”, as they feel that Swiss Franc is still “highly valued” at these current levels. The December Swiss may rise up towards the 110.15 level later today, but is showing signs of being top-heavy at these current 8-month high price levels.
Technical Outlook
CHF (SEP): The upside crossover of the 9 and 18 bar moving average is a positive signal. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. There could be more upside follow through since the market closed above the 2nd swing resistance. The next upside objective is 111.19. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 110.64 and 111.19, while 1st support hits today at 108.76 and below there at 107.42.