An Open Debate about the Future of the Swiss Franc

The EURCHF experienced an almost unbelievable flash crash last month. At the end of the day the EURCHF fell from 1.20 to far below parity. The currency earthquake was not only limited to the EURCHF.

In fact most of the Swissy currency pairs felt the impact: the Swiss Franc’s enormous bullish momentum shook the entire Forex market very hard. What happened? The Swiss National Bank (SNB) removed its intervention in the Forex market and informed the world that it was no longer supporting the EURCHF at 1.20.

The market was caught off guard and price vanished off the charts due to a lack of liquidity. When the storm had finally finished, the one-day drop created massive bearish daily, weekly, and monthly bars.

19- 2- 2015 eurchf weekly

More than a month has passed since that dramatic day and many questions bubble to the surface:

  • Have you already traded the Swissy?
  • Is anyone trading the Swissy?
  • Is the SNB intervening again?
  • Will the SNB intervene in the future?
  • Will the SNB lower interest rates to even lower levels?
  • Is the Swissy a tradable currency?
  • How will you trade it?
  • When will you trade it?
  • How do you interpret the massive bearish candles?
  • Does it impact your analysis?
  • How can a trader protect themselves against this? (go here)

Join the open debate and write down your thoughts in the comment section below!

I myself have been very conservative regarding the Swissy. I have not taken any Swiss Franc trades so far and I am not planning on doing so anytime soon.

In my opinion the value of technical analysis when applying it to the Swiss Franc charts is not as valuable as with other non Swissy currency pairs. Therefore I rather trade the other pairs.

For me there is no benefit in trading charts where the national bank has had such huge and regular interventions in the past years.

What do you think?

Are you interested in trading it sometime soon?

Drop a note and let us know.

19- 2- 2015 gbpchf weekly

For those that are interested in trading it, the SNB’s decision to lower interest rates to negative 0.75 seemingly has helped to curve demand for its Swiss Franc. In fact, some of the currencies have made an enormous recovery against the Swissy.

The GBPCHF is the best example due to the recent strength of the Great British Pound. This pushed the GBPCHF almost back to the same level as it was before the SNB action (as indicated a few weeks ago).

Other currency pairs have been struggling to muster enough power to make any serious momentum viable. The CADCHF for instance has recovered a few hundred pips but price action is still slow.

19- 2- 2015 cadchf

With interest rates set in very negative territory more Swiss weakness could be heading our way. Also, there is the potential of yet another SNB intervention to weaken the currency either publicly or in stealth mode. Perhaps the SNB has already started…

Thanks for reading and sharing this post with others.

Wish you Happy Hunting!

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