LONG EURCHF: POSSIBLE SNB INTERVENTION AT THE 1.08 HANDLE
Long EURCHF:
1. Having watched the 1.08 level closely post-brexit it certainly looks as if there is some FX intervention going on at the 1.08 handle - suspicions enforced even more as SNB President Jordan says FX intervention is on the cards should CHF move even higher/ Rate cut possible another 50bps.
2. Plus EUR vs CHF september rate expectations are skewed for a long EUR carry going forward + already EUR is more attractive than CHF (-0.4% vs -0.75% depo) - 1m CHF Libor currently pricing 25bps at 19% vs 1m EUR libor pricing 25bps at 12%.
3. Volatility is also v low so risk of downside is limitted, plus SNB are clear they will can intervene so the chance of long-term losses with this trade are close to 0.
Trading Strategy - buy EURCHF <1.0799 dips 1.081/5TP:
1. Buy EURCHF on any dips below the 1.08 level, maximum of 100pips TP but much more advisable to take 50 or by looking at the intra day moves even taking 10-20pips is possible several times a day as the market constantly moves higher after ANY dipping below the 1.08 handle.
- i wont be running a stop on this trade given the SNB's commitment and low IV and HV.
1. Having watched the 1.08 level closely post-brexit it certainly looks as if there is some FX intervention going on at the 1.08 handle - suspicions enforced even more as SNB President Jordan says FX intervention is on the cards should CHF move even higher/ Rate cut possible another 50bps.
2. Plus EUR vs CHF september rate expectations are skewed for a long EUR carry going forward + already EUR is more attractive than CHF (-0.4% vs -0.75% depo) - 1m CHF Libor currently pricing 25bps at 19% vs 1m EUR libor pricing 25bps at 12%.
3. Volatility is also v low so risk of downside is limitted, plus SNB are clear they will can intervene so the chance of long-term losses with this trade are close to 0.
Trading Strategy - buy EURCHF <1.0799 dips 1.081/5TP:
1. Buy EURCHF on any dips below the 1.08 level, maximum of 100pips TP but much more advisable to take 50 or by looking at the intra day moves even taking 10-20pips is possible several times a day as the market constantly moves higher after ANY dipping below the 1.08 handle.
- i wont be running a stop on this trade given the SNB's commitment and low IV and HV.
