EURCHF moves closer to the 1.2000 level
Adam surprise me by reminding me it was my 7 year anniversary (really?). It goes to show how time flies by when you are having fun.
For the EURCHF, it is getting closer to a historic level. From 2011 to 2014, the SNB did it’s best to keep the EURCHF from falling below the 1.2000 level.
There was all sorts of pressure on the pair (higher CHF) as a result of flights into the safety of the CHF and overall EUR weakness from Greece/overall EUR skepticism.
The SNB did not want to the currency to strengthen as their economy is reliant on selling goods abroad. So they pegged the rate at 1.2000.
On January 15th, 2015, the SNB abandoned the peg and the flood gates were opened. The price low is up for debate, but the accepted low is around 0.85. That is a 29% decline in a single day.
Fast forward to today- 1188 days from the depeg – and the EURCHF has moved to within 8 pips of the old peg.
For traders, you would expect that the price would stall on the first look. Today’s high at 1.1992 may be those sellers coming in (there should be some buying on a break above if momentum continues).
Technically, looking at the daily chart, the pair moved above a broken trend line on the daily chart at the 1.19344 level currently. That is a risk level now that 1.2000 has been sniffed. A move below could lead to more selling.
On a break of the 1.2000 level, a topside trend line comes in at 1.2062 (and moving higher).
The 1.2000 level is historic for traders who lived through it. The market certainly remembers it and after 1188 days, the price got within 8 pips of that historic level. Traders will likely lean against the level because of it’s significance, but over time perhaps the level becomes less important.