Swissie Surprisingly Outperforms on Tuesday (Midday Snapshot)

MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES

The improved global macro sentiment into the latter stages of Europe and Early North American trade has forced some fresh buying of equities, commodities and currencies on dips, as bulls look to take advantage of Monday’s pullback. The Euro has been very well bid on the day thus far and has managed to now clear the latest round of stops above 1.4015 to trade into the mid 1.4000’s. The Swiss Franc surprisingly stands out as the strongest performer on the day, despite the risk appetite, with many citing cross related sell interest in Eur/Chf as the key driver. The SNB has been defending the 1.5000 level over the past several weeks and it appears that the markets would like to see this level broken. On the data front, US housing data was on the whole slightly weaker than expected. While the house price index did come in better than forecast, a downward revision to the previous print left a flat result. Existing home sales were however weaker. Meanwhile, the Richmond Fed manufacturing index beat consensus estimates. US equities trade marginally lower into the London fix, while commodities are also offered.

ANALYSIS OF SELECTED RATES



We established a short trade in the major this morning and have attached this morning’s commentary below….

[Eur/Usd: Any pullbacks on Monday have been ignored into Tuesday with the market rallying quite impressively back towards Monday’s 1.3965 highs. However, our overall bias remains firmly bearish and we continue to favor selling into rallies in anticipation of deeper setbacks over the coming weeks. The market has been consolidating over the past several days and a fresh lower top is now sought out to be confirmed on a drop back below 1.3750. While we do see room for additional gains today beyond Monday’s 1.3965 highs, any push above 1.4000 is not viewed as sustainable and we will therefore look to sell into rallies towards the recent consolidation highs.] Position: SHORT @1.4010 FOR AN OPEN OBJECTIVE, STOP @1.4185.

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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