Hello again fellow traders!
With the (SNB)Swiss National Bank having surprised the currency markets with the removal of the 1.20 Eur/Chf support barrier, it was only a matter of time until currency pairs trading against the (CHF) Swiss Franc recouped some of their loss. Those losses from the date of the SNB meeting averaged a loss of over -15% paired with the majors Eur, Gbp and Usd. Having dropped that large of an amount, the market has been poised for a recovery of those moves. Such a large amount of people disintegrated the week of January 15th, that the market was able to rebound since there was no loss to the 'market'. So much money vanished, where usually stops would be run on people trying to buy the rebound, that I think the pairs Eur/chf, Gbp/chf, Usd/chf will be left alone to rebound, because enough stops were run to cover weeks and months of trading. If anything, I think most traders that do specialize in those pairs are hesitant to catch a falling knife, which means there could be low volume on the buy side (low amount of stops) and traders that are coming in late trying to sell on the up moves are having their stops run. Yeah, just about everyone is getting burned with CHF associated pairs. Even those who are trading Euro associated pairs are feeling the heat. One would think after the Euro was hammered from the SNB, then the (ECB) European Central Bank, that a safe play would be buying the Euro against anything other than CHF. Like the Eur/aud, Eur/gbp, Eur/jpy or the Eur/usd. Somehow that already seems to be integrated within the 'invisible hand' of the currency market. 'It' knows traders are scared to trade the CHF, so they would be trading other Euro pairs, hence Eur/chf going sky high^, no one is trading it. Except you and I. Holding the following long (buy) positions Aud/jpy, Eur/chf, Gbp/chf, Gbp/jpy, Usd/chf and Usd/jpy.
Thank you, please feel free to comment on any post.
Professor Chaney
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Monday, January 26, 2015
SNB, CHF reaction squared
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