EUR/CHF gapped sharply higher overnight from 1.2010 to 1.2075, triggering large hedge fund stops above 1.2025 and again above 1.2050. There were 3 possible explanations:
- ‘Fresh’ news that the SNB was preparing to tax CHF deposits; but fresh news turned out to be only a regurgitation of old news
- Active SNB intervention; also complete rubbish. As we reported earlier in the week, a Dutch Prime Broker is bidding at 1.2010 during European and NY trade on behalf of the SNB and the SNB itself is sitting at 1.2000.
- ‘Fat fingers'; also no evidence whatsoever that some fat finger managed to buy EUR5 billion to move the pair!!
My advice has remained the same for the last 6 months, avoid this pair and look elsewhere for opportunities.
