In spite of a large jump in the ZEW survey of Swiss investor sentiment, the Swiss Franc has made asizable downside move early in today’s trading. Yesterday’s 1-year high versus the Dollar and 8-month highversus the Euro may be “too high, too soon”, particularly with Swiss inflation still at minimal levels. Given thedegree that safe-haven inflows have boosted prices recently, a surprisingly hawkish Fed could create somesevere chart damage to the Swiss Franc later today. The March Swiss may find support around the 112.44 areathis morning, and along with the Yen may have the most to lose if the Fed decides to start tapering at today’sFOMC meeting.
Technical Outlook: The market made a new contract high on the rally. The daily stochastics gave abullish indicator with a crossover up. Studies are showing positive momentum but are now in overbought territory,so some caution is warranted. The market’s close above the 9-day moving average suggests the short-term trendremains positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture.The near-term upside objective is at 113.81. The market is approaching overbought levels with an RSI over 70.The next area of resistance is around 113.50 and 113.81, while 1st support hits today at 112.70 and below thereat 112.22.