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Trading Outlook – Neutral

Jarratt Davis
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Originally updated: 07:00

Trading Bias: Neutral

Currency pair: None

Current Sentiment: -

In today’s trading session we will be focussing on the CHF pairs, awaiting key levels of entry to provide an opportunity to get into the market.

Fundamentals:

With little in terms of high impact news on the calendar and a relatively quiet overnight session as far as news flow we remain on the sidelines at this stage of the session.

The EUR fell dramatically last week, we know this is a concern to the SNB, the Swiss whom hold Europe as their primary trading partner rely on the EUR retaining some strength to support Swiss businesses.

We know that current price action is a concern to the SNB who wish to see the EURCHF pair back above 1.10, to achieve this level the SNB will likely intervene in the markets and have a history of doing so publicly and privately.

Essentially they will buy up large amounts of EUR’s on the EURCHF pair which of course raises price action, the shift in price action to strengthen the EUR across the board – we’re not too concerned by that as we don’t want to get caught buying EUR’s while the ECB is actively doing quantitative easing.

However another consequence of SNB action is a softening of the CHF, this is something we can take advantage of as it is in line with our bearish bias.

Technicals:

Given the lack of immediate set ups available at this stage of the session the pairs and levels I will be looking out for that are in line with the fundamentals are;

Short – EURUSD around 1.0840
Long – NZDCHF around 0.7200
Long – USDCHF around 0.9870

As always keep an eye on intraday news that may affect the outlook on these positions.

Other Market Moving News:

The dollar index reached a new 11 1/2 year high of 98.196, having gained about 3% so far this month.

Australian business confidence fell to its lowest in more than a year following the recent cut in interest rates which has failed to dispel uncertainty over the economy.

We have a relatively quiet day on the calendar with the Bank of England’s Gov Carneys speech being the main event at 2:35pm London time

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