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I have some reasons to believe that going long on EUR/CHF is a very good Idea in the long term (above 3 months).

Take a look at them, and lets have a green full discussion .

1) The stress in the euro area is fading away, slowly but steadily
Systemic risk has faded in the euro zone, and further progress will be made to tackle the solvency issues of euro zone countries, the Swiss franc should lose its appeal as an alternative investment,

as said by Societe Generale

This is good for EUR(not EUR/USD) in the long term
At the same time not so good for CHF, Which gains when risk aversion flares up.
Traditionally USD, CHF and JPY enjoy the safe haven tag.
But lately the BOJ decision to have a weaker yen took the sheen away from JPY.
And USD will only become more attractive as the tapering measures unwind.


2) Swiss Franc is supported by big current account surplus (10.25% of GDP)
A large part of this inflow is through the banking sector.
The image below clearly shows how closely the current account surplus and the banking sector are related.
During the 2008 banking sector collapse, the current account surplus went negative.

But it will be very difficult for the bank
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Skif avatar
Skif 12 Feb.

Хороший вариант , только пока eurchf ниже 1.24 . поход наверх под большим вопросом (((

rokasltu avatar
rokasltu 19 Feb.

I think that SNB's 1.20 EUR/CHF floor is very brave decision; but I think this floor will be taken away (or broken) sooner or later and if this will be done it is very difficult to predict what will happen with EUR/CHF longs (I mean slippage of SL might be huge)

500nm avatar
500nm 20 Feb.

I do not think that SNB will take away the floor, it has mentioned several times that the floor is necessary and most importantly the increase in euro reserves by SNB is an indication that they will fight to save the 1.2 level

500nm avatar
500nm 20 Feb.

But when a situation arises that hedge funds or some other power tries to break the floor, there will be some fight before it breaks and we will have time to come out. that is why i said forget about the trade unless a new fact emerges which changes the analysis

500nm avatar
500nm 20 Feb.

When i googled about eur/chf stop loss at 1.2, i found my article among the top. that was cool, but i also found this http://www.forexlive.com/blog/2012/04/02/eurchf-orders-snb-expected-at-1-2020/

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Central Bank interventions in the currency market are generally aimed at keeping the relative value of the domestic currency in line with monetary and economic policies of the country involved. Such interventions normally lead to significant and unexpected movements when measured against the average Daily and Weekly market ranges of most currency pairs. This was evident on September 6 when the market reacted to the SNB`s declaration to defend a 1.20 rate for the EURO CHF, sparking an immediate depreciation of 10.0%. While many may believe that future Swiss Franc weakness will be due entirely to the SNB, there are others who believe that it was already on the cards, based on the natural laws of Fibonacci prices.   When currency pairs are found to be moving in sync with Fibonacci Prices on the Monthly Charts, these targets tend to lead to major price reversals. This appears to be the present scenario for the EURO CHF which has been rallying since it breached the major Fibonacci target of 1.0839 last month. Given the precedent of similar rallies at Fib targets in 2008 and 2010 for this same currency pair as well as for the GBP CHF, it is very likely that the overall depreciation th…
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Livornese avatar
Livornese 12 Sep.

Nice point of view! I personally don't love waves but I see that are a really powerful tool. Thumb up.

DaddyPapi avatar
DaddyPapi 12 Sep.

Thanks Livornese...you from Livorno? your team not doing too badly in Serie B...10th or 11th position? yeah these waves are a necessary evil..thats why I dont watch a trade that I have on, too much of an emotional roller coaster.Fibs work on some currencies, but not others or all the time. Faster the market, the less accurate the Fib tool is, but the slower it is, more likely it obeys the Fibs.

hedgefund101 avatar

Good technical article, if it works 4 u then by all means use it. I am not a fib user though. Keep up the good work. Zeen

LinnuxFX avatar
LinnuxFX 13 Sep.

Another great article, good luck for this mounth too...

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