The EUR/CHF pair rose during the course of the session on Thursday, after initially falling. By breaking well above the 1.05 handle, the market looks like it is getting ready to go towards the 1.06 handle, which is where I think that the market truthfully breaks out. I recognize that recently it has been suggested that the Swiss National Bank has been working against the value of the Swiss franc, and that almost undoubtedly means that they have been involved in this pair. The fact that the market is closing towards the top of the range of course means that there should be some follow-through during the session today, so I think that any short-term pullback is probably a buying opportunity.
After all, the Euro looks strong at the end of the session. It is raising against most currencies, and as a result I think that this market will finally break out. Once it does, I believe that we are heading directly to the 1.08 level, and then possibly parity. Keep in mind that there is a little bit of a “sigh of relief” when it comes to Greece now, and that should get rid of some of the negativity on the Euro.
Don’t fight the central banks
One thing you should never do is fight central banks. The Swiss National Bank of course has been trying to devalue the Swiss franc for some time now, and has gotten back into the markets again. Remember, even though they finally had to give way, the Swiss held this pair at the 1.20 level for years. I certainly do not have enough money in my account to fight them, so I have no interest whatsoever in selling this pair. I think that pullbacks will offer buying opportunities, especially now that the Euro is starting to strengthen against other currencies. With this, I am a buyer once we clear the 1.06 handle, or type of short-term pullback that show signs of support.
