So done a bit of research. Turns out on Nov 30 the Swiss goes to the polls to vote on an initiative that imposes significant constraints on the SNB’s conduct of monetary policy. What these initiatives are I don’t know maybe you or someone can explain in more detail. But according to Barclay Capital the passage of the referendum would alter its (the SNB) incentives to pursue balance-sheet related unconventional policy measures, hence would reduce the SNB’s commitment to the EURCHF floor of 1.2000
According to Barclay’s
As a result, it may increase the likelihood of the SNB following the European Central Bank (ECB) in introducing negative deposit rates
and
While gold markets have been most focused on the issue, the five-year phase-in would limit volatility, though passage of the initiative likely would raise the long-term equilibrium price for gold, in our view
Also, Goldman Sachs view that Euro area weakness is set to adversely affect the Swiss economy. Therefor the SNB is in no hurry to hike rates and that the ceiling eventually will not be a binding constraint to hike rates.
Consequently, we have pushed back our forecast for the first SNB rate hike to June 2016 (from December 2015 previously)
The SNB’s exchange rate ceiling against the Euro is often seen as a binding constraint on its future interest rate decisions. But the exchange rate commitment is only likely to become a constraint on rate decisions if the CHF remains close to the 1.20 level against the Euro
There are several reasons that would argue for a depreciation of the CHF against the Euro, opening up the possibility for the SNB to eventually start tightening policy. Most importantly, we expect the situation in the Euro area to gradually improve again over the course of the next year, thereby reducing the risk of a re-emergence of safe haven inflows into the CHF
Now what does that all mean to me. Well not a hell of a lot. I make things from milk so its all a bit of mystery to me. What I do understand is that this 1.2000 ceiling may not be as un-penetrable as you and therefor a majority of the players might think.
So maybe the smart money waits for the price to retrace to about the 1.21170 mark, whack on a sell with a 25 pip SL waiting for a min 125 pip return as the price turns, heads south and breaks though the 1.2000 level taking out all the stops you numb-nuts have in place just below it because of this safe ceiling mentality. The immediately reverse and go long as the price recovers. Morgan Stanley have a project price of 1.23 by end of year.
I also note that Danske Bank sell side research has a short term short trade on with a TP set at 1.2020
As for “scalping” out 10 pips here and there, as someone who does it as part of his trading plan, there are plenty of other opportunities out there where the cost to trade can be halved compared to the EURCHF so again why bother.
So to yourself and emeraldoc (whom I know will be reading). Watch out for us moron want to be traders. After a few years and several thousand hours we start to learn a thing or two. And in this zero sum game I don’t care who’s money it is that I get but at the moment yours and emeraldoc looks pretty cold and hard and nice.
I hope this thread will continue on…