“The year is 2022 AC. All central banks of the world are starting to raise their key interest rates due to higher inflation. Well, not entirely.. One small country in the middle of Europe still holds..”
I think, you got the point. The SNB with its policy rate of -0.75% is still showing no signs to change their accommodative monetary policy anytime soon. And finally the swiss Franc is once again doing what the SNB is constantly working on since the eurozone debt crisis: become cheaper. Well, compared to the levels we have witnessed before 2011 the swiss Franc is still trading high but the recent sell off is quite remarkable, in particular against the Dollar.
USDCHF -- 0.9893
Parity is looming and all we need to see for it and beyond could be higher than expected US CPI numbers this European afternoon. Together with the 200 dma at 1.0063 (EDIT: it was the 200 monthly moving average, sorry for that) we have a well defined target zone for Dollar bulls. Dollar bears, on the other hand, tend to see resistance in this zone and I agree for now.
The Dollar has been doing very well lately and their is room for a correction. The currency pair is overbought and a 2% correction would not change anything in the bullish picture. It could only become critical for the dollar below 0.9700/0.9680.
The only problem is that the stimulus has to come from the USD, we have little to expect from the Swiss National Bank at these still high CHF levels.
EURCHF -- 1.0448
The first attempt to break the 200-day moving average is usually unsuccessful. That also happened yesterday. Together with the psychologically important level of 1.0500, the resistance was initially too great. Most important indicator for Euro against swiss Franc remains EURUSD. Any Euro driven bounce higher should lift EURCHF as well. Should a weaker Dollar lift EURUSD the impact of USDCHF is higher and could dampen the movement in EURCHF.
The next support comes in early. At 1.0400 you can already start to look for longs but bulls do not want to see the currency pair below the mid Bollinger band (1.0309), the 50 ema (1.0304) and the 1.03 big figure.
Good luck,
Sebbo