SNB: the new currency band?
By Alex Weber
Swiss franc fell to its lowest level against the euro and the dollar since Jan. 15 on Monday amid speculation that the Swiss National Bank (SNB) has set a new target for the country's currency. Swiss Sunday paper Schweiz am Sonntag reported the SNB was now unofficially targeting a trading band with the euro between 1.05 - 1.10 euros, citing the “well-informed sources”.
There is no surprise in the SNB’s behavior for me – the export-led Swiss economy would clearly be hurt by the sudden decision to abandon the 1.20 peg, announced in mid-January. In the current conditions I look for a EUR/CHF recovery towards the 1.0775 area – this is where 61.8% Fibonacci from the January drop lies.
It is very probable that the SNB targets the Swissie against the other currencies. Next near-term bullish targets for USD/CHF are seen at 0.9350 and 0.9520.
Chart. H4 EUR/CHF