Euro / Swiss Franc (EUR/CHF) : The Swiss National Bank protects our stop-loss
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03/21/2012 | 10:13am
Opinion : Bullish above 1.199 CHF
Target price : 1.25 CHF
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By confirming, during its quarterly meeting, to defend the lower threshold of 1.20 CHF for one euro "with all the required determination" and she stood "ready to buy for this purpose unlimited quantity currencies ", the Swiss National Bank (SNB) offers us an ideal buying opportunity.
The institution also stated that, even at that price, the franc is at a high level. The confederation would also be threatened by deflation risks while the SNB lowered its inflation forecast to -0.6% for 2012, 0.3% for 2013 and 0.6% for 2014.
Thus "the franc's strength continued to pose great challenges to the
economy," said the central bank but the price floor "has effect". Indeed, this control of the exchange rate greatly reduces volatility and provides better visibility for exporting companies. The Swiss economy is stabilizing after a year of slowdown. The monetary authority improves its growth forecast of 0.5 to 1% for 2012.
Technically, it could be very interesting to buy the currency with placing a tight stop loss just below the price floor of CHF 1.1980. According to its risk profile, the use of leverage may be a relevant choice, especially if the SNB decided to raise its future course to 1.25 CHF, some market rumors have already suggested.
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Rodolphe Steffan
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