The Threat Of SNB Intervention Has Limited EUR/CHF Volatility Creating Scalping Oppor

The EURCHF has seen very little volatility since the Swiss National Bank intervened and with the central bank�s upcoming rate decision there may be very little risk of price swings. Therefore, the pair may present an opportunity for profits for traders looking to us scalping opportunities.

[B]Key Technical Levels[/B]

The EURCHF has traded in a 300 pip range since the Swiss National Bank took action which has narrowed to 150 pips in the past month. Although, we have seen a slight increase in volatility over the past few days it was relatively small compared to other currency pairs. The upcoming SNB rate decision at 12:30 GMT tomorrow will present major event risk, as policy makers could warn of future efforts to limit the appreciation of the franc as they look to generate demand for exports. However, before hand we could see an ideal environment for high frequency traders as volatility typically drain ahead of events with potential to move markets.

[B]Quantitative Metrics[/B]

We are seeing a narrowing of the Bollinger Band width and a declining ATR which adds to the EURCHF’s attractiveness. At 55 bps the pair’s average true range (ATR) is far below that of other major pair’s. The narrowing Bollinger Band does present the risk of a breakout, but that will most likely be trigger by the pending event risk which presents a defines window of opportunity for scalpers to execute their strategies.

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