Swissie surges as intervention concerns ease

The Swiss franc is the top performer against a weaker greenback early in the North America trade, advancing more than 0.70% at the open. Remarks by Swiss National Bank Vice President Thomas Jordan sent the franc higher after he cited deflationary concerns adding that it “would be incorrect to conduct a policy that would lead to a competitive depreciation by weakening the franc to gain and export advantage.” He added that policy makers are facing a “dilemma” in that the “situation is very difficult for the domestic economy, we have enormously expansionary conditions.” The remarks eased concerns that the SNB may step back into the currency markets to stem the rise of the swissie.

Accordingly the USD/CHF has come under pressure with the pair breaking below the key 61.8% Fibonacci extension taken from the October 27th and November 3rd troughs at the 0.90-figure before finding solace just above the 38.2% extension at 0.8910. Topside resistance holds just above the 50% extension at 0.8960 backed by the 0.90-handle and 0.9030. Interim support rests at 0.8910 with subsequent floors seen at 0.8880 and the 23.6% extension at 0.8850. Look for the swissie to continue to appreciate as intervention concerns subside with a turn in risk appetite to the downside likely to trigger substantial swissie gains.

Key Levels/Indicators

Level/Indicator

Level

100-Day SMA

0.8437

50-Day SMA

0.8819

20-Day SMA

0.8874

2011 CHF High

0.7079

The Australian dollar is the weakest performing currency an hour into US trade, sliding more than 0.37% against the greenback. Weaker than expected trade balance data overnight continue to weigh on the aussie which encountered strong resistance at the 1.0360 level early in the session. The descending channel described in yesterday’s EUR/USD, AUD/USD Scalp report, remains intact with the aussie eyeing interim support at the 23.6% Fibonacci extension taken from the October 27th and November 3rd crests at 1.0315. A break here eyes subsequent support targets at 1.0280, the 50% extension at 1.0235, and 1.0205. Topside resistance holds at 1.0360 with subsequent ceilings seen at the 1.04-figure, 1.0440, and 1.0475. The aussie remains vulnerable to swings in broader market sentiment with a sell-off in risk likely to accelerate aussie losses. Overnight traders will be eyeing data out of Australia with the November Westpac consumer confidences surveys and September home loans on tap. The data represents limited event risk as all eyes remain focused on developments out of Europe.

Key Levels/Indicators

Level/Indicator

Level

100-Day SMA

1.0425

50-Day SMA

1.0225

20-Day SMA

1.0345

2011 AUD High

1.1079

Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.

Twitter: @MBForex
WEB:
www.DailyFX.com

About the Author
Michael Boutros

Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.

Twitter: @MBForex
WEB: www.DailyFX.com

Comments
comments powered by Disqus