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The Swiss Franc soars as the Swiss National Bank and the Bank of England join the rate hike party while the Bank of Japan dances alone -by Ecork

Swiss Franc, Euro / Swiss Franc, US Dollar, Swiss National Bank, Bank of England, Sterling / US Dollar, Bank of Japan, US Dollar / Japanese Yen – Talking Points

  • Swiss franc finds support after Swiss central bank rises 0.50%
  • Stocks remain under pressure as risks from central bank actions increase
  • With the Swiss Central Bank joining the Federal Reserve and the Bank of England this week, the EUR/CHF will drop?

The Swiss Franc rose as the fallout from the Swiss National Bank’s unexpected 50 basis point interest rate hike continued. The Bank of England (BoE) by 25 basis points saw the Pound rise as well as the US Dollar fell.

USD/CHF set a double top after hitting a mid-May high of 1.0050 on Wednesday. It has since collapsed below 0.9700 after yesterday’s SNB announcement.

The Swiss National Bank has a history of unconventional policy changes. The most famous was the abandonment of capping the franc’s rally in 2015 which saw the EUR/CHF rise from 1.2000 to 0.8600 at a brisk pace. He then recovered again above parity, where he has mostly remained ever since.

The Bank of England was more upfront, introducing a 25 basis point rate hike. The GBP/USD pair was softer during the Asian session.

While the US dollar is generally under pressure elsewhere, the USD/JPY is galloping north after The Bank of Japan left monetary policy without change. Inflation data next Thursday will be closely watched there.

The severely negative Wall Street liquidity session saw futures recover somewhat after hours. Australian and Japanese stocks had a bearish day, but the Hong Kong and mainland Chinese markets gained some ground.

Industrial metals are weaker while gold is fairly steady near $1,842 an ounce. Crude is a bit weaker with WTI futures below $117 and Brent near $119 a barrel.

Looking ahead, after the Eurozone CPI, Canada and the US will see industrial production numbers.

You can view the full economic calendar over here.

EUR/CHF Technical Analysis

In the wake of the Swiss Central Bank’s rate hike, the EUR/CHF collapsed below an ascending trend line to fall again within a wide 4-month range from 0.9973 – 1.0515.

The move rebounded down from the breakout point at 1.0132 and closed above the previous low at 1.0189 and these levels may provide support.

a double top It was placed last week when price was unable to break above last month’s high at 1.0515.

On the upside, the resistance can be Simple Moving Average (SMA) Or the previous highs 1.0478 and 1.0515.

Schedule cread in TradingView

— By Daniel McCarthy, Strategist for DailyFX.com

To connect with Daniel, use the comments section below or Tweet embed on Twitter

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