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Trade Closed: 2012-09-10 22:45

EUR/CHF 4-hour Chart

I guess the SNB really was determined to defend the 1.2000 mark at all costs! Despite all the weakness surrounding the euro in recent weeks, EUR/CHF remained above the 1.2000 mark, not once dipping below the SNB’s peg.

I’ll admit, there were times where I was starting to hope on this pair, as it traded within a tight range of less than 10 pips for the better part of THREE MONTHS. Still, I kept telling myself that all we needed was a bit of jawboning from the SNB or a change in the peg so that my patience would be rewarded.

And that’s exactly what we got!

Late last week, amid the positive reaction of the ECB’s launch of the OMT program, we also heard rumors that the SNB would be raising the peg from 1.2000 to 1.2200! This combination of news helped the pair soar above the 1.2100 mark! Boomshakalaka!

Profit target hit at 1.2100: +84pips / +1.00%

All in all, this left me with a reward-to-risk ratio of about 1.82:1, which ain’t that bad at all. I’m happy I stuck to my trading plan, as there was no indication that the SNB would back off its pledge to hold the peg.

Overall, a pretty good week for me, as I also grabbed some nice pips on my EUR/JPY trade.

Congratulations to everyone who had the patience to hold on to this trade for the past 3 months! Give yourselves a pat on the back – it’s well-deserved!

Trade Update: 2012-05-25 00:30

EUR/CHF 4-hour Chart

How funny is it that the chart above looks just like the heart rate monitor of a man who just came back to life after flatlining?? That’s EUR/CHF for you!

For the longest time, it looked like this pair was dead as it was stuck in the tightest of ranges. See for yourself: for over a month, its daily movement was limited to within 10 pips!

But yesterday, it came back to life and spiked up to 1.2078 as rumors went around that Rabobank has been acting on behalf of the SNB and loading up on EUR/CHF longs recently. Some say that up to 50 billion EUR worth has been purchased in the past few days alone, but so far, neither the SNB nor Rabobank has confirmed these rumors.

Speaking of rumors, word on the street is that the central bank may also introduce a tax on deposits. Such a move would act in favor of our trade as it would dull the Swiss franc’s safe haven appeal. Oh yeah!

But whether or not this is true, I don’t think that this is the last we’ll hear of SNB intervention speculation. The SNB’s commitment to defending 1.2000 is being tested by the markets in light of the euro’s recent sell-off, and I think it’s only right that the central bank flex its muscles.

The surge in EUR/CHF that we’ve been waiting so long for may be just around the corner, my friends. Remember, patience is a virtue!

Trade Idea: 2012-04-11 02:19

EUR/CHF 4-hour Chart

Looks like the market is determined to put the Swiss National Bank’s (SNB) threats to the test, eh? Price is currently just 15 pips away from 1.2000!

Even though the central bank has gone on record many times to say that it will defend EUR/CHF at this major psychological handle, the market has been able to find its way down. As a matter of fact, it touched the 1.2000 handle late last week!

Since then, the pair has been hovering above the critical level. With risk aversion creeping back in the market’s psyche (Spanish and Italian bond markets made a mess of things yesterday), EUR/CHF has been able to stay in dangerous territory.

But I have a feeling it won’t be able stick around much longer. Why? Because I have full faith in the SNB’s ability to defend 1.2000! Heck, some guys say that we may even see a direct market intervention soon. Now’s as good a time as any for the SNB to step in, right?

Look at it this way: if the central bank allows the market to break through this “minimum acceptable exchange rate,” it will compromise its credibility, which is a major no-no for central banks.

I don’t think SNB interim Chairman Thomas Jordan will allow this to happen under his watch, so I’m putting my money on the SNB and I’m buying EUR/CHF at market:

Bought EUR/CHF at market (1.2016), stop loss at 1.1970, profit target at 1.2100.

I set my stop a good distance below the 1.2000 handle, in case the market gets testy. And I have my profit target temporarily set at 1.2100, which was an area of interest in the past.

What do you guys think of my trade? You think the SNB has what it takes to keep 1.2000 intact?


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