Recent improvement with Swiss inflation levels, which have now climbed back to positive year-on-yearreadings for the first time in over two years, have played a major role in the Swiss Franc making a strong upsidemove this month. With the Euro/Swiss spread closing in on the 1.22 level for the first time since early May andwith Tuesday’s rally up to the 113.00 level, however, the SNB’s concerns that the Swiss Franc is “overvalued”may become more of a factor heading into their monetary policy meeting on Thursday. The December Swiss mayrise up towards the 112.88 area later today, but may need a fresh inflow of safe-haven support in order to extendany rally up into new high ground.
Technical Outlook: The market made a new contract high on the rally. Daily stochastics have risen intooverbought territory which will tend to support reversal action if it occurs. The market’s close above the 9-daymoving average suggests the short-term trend remains positive. With the close over the 1st swing resistancenumber, the market is in a moderately positive position. The next upside target is 113.41. The market isapproaching overbought levels with an RSI over 70. The next area of resistance is around 113.08 and 113.41,while 1st support hits today at 112.35 and below there at 111.94.