New & Fundamental Shift in CHF: SNB SHOCKS THE MARKET!!!!
Fundamental Analysis:
On Thursday, June 16,@ 3:30am EST, the SNB surprised the market by hiking a shocking 50 basis points. The consensus was to maintain a -0.75% rate. The SNB raised rates to counter a 3% inflation so that in the medium-term there will be more price stability. Price stability is key for all free market and robust economies. The SNB will keep an eye out on a quarterly monetary policy basis.
The Current Value of CHF:
The CHF has outperformed al G10 FX currencies on a daily and weekly basis, significantly. This is not the norm. This is a new and fundamental shift in the CHF currency and the SNB's press release and the SNB's monetary action confirms it. In the short-term, I believe that EUR/CHF may rise due to EUR's bullish COT extreme with some possible CHF weakness pushing it. A CHF weakness will come from its losing appeals as "highly valued" among large market participants; thus, the CHF will suffer the consequences. However, in the medium-term, I look to sell EURCHF at a more appealing price and aim for parity of lower when the weakness in CHF or the possible strength in EUR wears off or reaches a level of supply.
An appealing price for me is a sell zone of around 1.0256 to 1.0310. Here in this zone, risk management, for me, is more appealing and desirable. Anything lower, I do not like.
News conference of the Swiss National Bank of 16 June 2022:
snb.ch/en/ifor/media/id/webtv-event?event=wc_624edad8a0942a5759495011
SNB News Conference Press Release:
snb.ch/en/mmr/speeches/id/ref_20220616_zur/source/ref_20220616_zur.en.pdf
SNB will adjust policy to respond to upcoming shocks, president says:
youtube.com/watch?v=iGyPG3jmgq0
On Thursday, June 16,@ 3:30am EST, the SNB surprised the market by hiking a shocking 50 basis points. The consensus was to maintain a -0.75% rate. The SNB raised rates to counter a 3% inflation so that in the medium-term there will be more price stability. Price stability is key for all free market and robust economies. The SNB will keep an eye out on a quarterly monetary policy basis.
The Current Value of CHF:
The CHF has outperformed al G10 FX currencies on a daily and weekly basis, significantly. This is not the norm. This is a new and fundamental shift in the CHF currency and the SNB's press release and the SNB's monetary action confirms it. In the short-term, I believe that EUR/CHF may rise due to EUR's bullish COT extreme with some possible CHF weakness pushing it. A CHF weakness will come from its losing appeals as "highly valued" among large market participants; thus, the CHF will suffer the consequences. However, in the medium-term, I look to sell EURCHF at a more appealing price and aim for parity of lower when the weakness in CHF or the possible strength in EUR wears off or reaches a level of supply.
An appealing price for me is a sell zone of around 1.0256 to 1.0310. Here in this zone, risk management, for me, is more appealing and desirable. Anything lower, I do not like.
News conference of the Swiss National Bank of 16 June 2022:
snb.ch/en/ifor/media/id/webtv-event?event=wc_624edad8a0942a5759495011
SNB News Conference Press Release:
snb.ch/en/mmr/speeches/id/ref_20220616_zur/source/ref_20220616_zur.en.pdf
SNB will adjust policy to respond to upcoming shocks, president says:
youtube.com/watch?v=iGyPG3jmgq0
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