EUR/CHF Creating Scalping Nirvana With Tight Range And Increasing Volatility

The EURCHF has remained in a tight range since the SNB intervened which has made it a pair to target for scalping strategies. However, price action at times can be too confined limiting any profit potential. Today we are seeing wider price swings which are creating more opportunities for traders and should garner their focus.

[B]Key Technical Levels[/B]

The 200-Day SMA has been a solid level of support for the pair and recent tests have helped increase intra-day volatility. The SNB’s Jordan calmed fears of any intervention stating that it was “natural “ for markets to behave in this manner. It is clear that unless the central bank sees significant appreciation of the Franc against the Euro they will remain on the sidelines which lead to wider price swings intra-day increasing profit potential. Another pair to watch is the USD/JPY which continues to find support near 90.00and a recent test could create desired price action for high frequency traders.

[B]Quantitative Metrics[/B]

A miniscule ATR of 54 bps enhances the attractiveness for the EURCHF for scalpers as it is less than half of almost all of the pairs listed below. The USDCHF is the only other pair close with a range of 95 bps for obvious reasons. The pairs narrowing Bollinger band width also makes a strong case for using scalping strategies. Also, the NZD/USD continues to experience a declining ATR and is a pair to watch.

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[I]To discuss this report contact John Rivera, Currency Analyst: <[email protected]>[/I]