EUR/CHF Daily Fundamental Analysis for August 01, 2011

The EUR/CHF on Monday is expected to start a new volatile week after ending last week bearishly with a new historic high for swissy powered by rising haven demand.

The sovereign debt woes are back dominating the scene after Moody’s put the Spanish credit rating under review for a possible one step downgrade, while jitters intensified on Friday after the Spanish Prime Minister Zpatero called for early elections in November instead of March as the austerity measures eroded his Socialist party’s popularity and now political vacuum will intensify the jitters and market pressures on Spain that is too big to fail!

This will be the main pressure on the euro with the start of the week and the support for swissy on haven demand. Volatility is expected with the market opening to the reaction on the debt ceiling debate from the United States and whether any progress can unwind the negativity on the weak GDP from the U.S. as the deadline approaches and eased woes will ease the demand on swissy as a haven.

Also on Monday, the euro area is set to release the final revision for the PMI Manufacturing for July at 08:00 GMT and expected to maintain the slowing pace from June unrevised from the advanced estimate of 50.4.

At 09:00 GMT the euro area unemployment is due and expected steady at 9.9% in June.

EUR/CHF Technical Analysis for July 29, 2011

EUR/CHF fell again on Thursday, showing just how bearish this pair really is. However, during the day we did get a bit of a bounce, but that was reversed in late US trading. We continue to like selling this pair, and believe that 1.15, and certainly 1.18 will try to act as a ceiling as we drift lower.

EUR/CHF Daily Fundamental Analysis for July 29, 2011

The Swiss franc continues to be the strong winner in the market amid the shaky sentiment and mixed sentiment with the gloomy outlook for the global economy.

Risk aversion remains the dominant factor affecting the pair and supporting swissy to hold its gains versus its major counterparts, and surely including the euro. The debt woes on both ends of the Atlantic, jitters over the outlook for growth, and downbeat earnings all weighed on the sentiment and kept swissy favored for more gains.

We saw more downside pressure on the euro after the European Commission reported the drop in confidence in July, where businesses and consumer confidence declined sharply affected by the major debt headwinds.

Also, late Wednesday action by S&P to lower Greece’s credit rating further and insure that the announced debt restructuring still accounts as selective default supported the majority of skeptics over the capability of the summit measures to contain the crisis whether the EFSF role or the 109 billion euro aid package to Greece.

Friday’s trading will still be all about the prevailing mixed sentiment and jitters as the market reacts to the House vote on the Republican plan to cut spending and raise the debt limit which is still widely expected to be rejected yet still no other solution is attained.

The end of the week trading and also the U.S. advanced GDP for the second quarter will intensify the fluctuations as the sentiment remains negative and that all collectively supports the franc to keep its upper hand for now.

From the euro area, the week will end with the flash CPI estimate for July at 09:00 GMT where inflation is expected to have held at 2.7%.

EUR/CHF Technical Analysis July 28, 2011

The EUR/CHF pair fell again on Wednesday, and retested the 1.15 level as support. The level could be important as it is a large psychological number, but the pair has already broken through it previously, so a move lower isn’t all that surprising if it happens. The pair is certainly a “sell only” pair, and we have made a lot of money doing just that, so we sell rallies.

EUR/CHF Daily Fundamental Analysis for July 28, 2011

The Swiss Franc maintains its strength and strong appeal in the market amid the rising uncertainty and pressures and haven demand is keeping the EUR/CHF biased to the downside with the upper hand still Swiss!

On Wednesday renewed debt woes in the euro area supported the franc to gain more stability and continued to trade around its historic highs versus the euro.

The euro weakened further after German finance minister Wolfgang Schaeuble said they are not going to issue “any blank checks” to fund the bond purchases. His comments fueled already lingering fears that the EFSF is not sufficient to prevent a crisis in Italy and Spain which are too big to fail and the fund is surely insufficient to salvage them.

Spanish and Italian bonds declined on the comments and the bond market remained jitter, though the drop was not exceptional and remained within the recent established range following the summit decision.

The focus in the market remain on the high uncertainty over the outlook for the debt crisis in Europe, the debt ceiling debate in the United States and the future of the global economic recovery and this heightened uncertainty is keeping the haven demand evident on swissy and favors the currency for more gains versus the euro.

On Thursday the market will focus on the vote in the United States on Boehner’s tow-step plan to raise the debt ceiling and cut $3 trillion in expenditure, the vote was already postponed from Wednesday and President Obama already threatened a veto. The jitters will prevail and will affect even the EUR/CHF and the strength of swissy with haven demand.

Other news that will affect the pair will start from Germany at 07:55 with the jobs report for July. Unemployment change is expected with a drop of 17,000 improving from 8,000 thousand added in June. Unemployment rate seasonally adjusted is expected to hold at 7.0%.

Thursday is the euro area confidence day with the report due at 09:00 GMT. The Business Climate Indicator is expected to slow to 0.84 from 0.92, Economic Confidence expected to drop to 104.0 from 105.1; the Industrial Confidence expected also lower to 2.0 from 3.2 and Services Confidence to 9.4 from 9.9. The final estimate for Consumer Confidence is expected unrevised at -11.4.

EUR/CHF Technical Analysis July 27, 2011

The EUR/CHF pair rose on Tuesday, as the world bought Euros. This is mainly in reaction to the move in the EUR/USD, which of course is spurred on by the debt limit talks not going anywhere in DC. This move should prove to be temporary, and selling rallies should prove to be fruitful again. We are still very much bearish of this pair.

EUR/CHF Daily Fundamental Analysis for July 27, 2011

The euro showed advance against the franc on Tuesday trading after successful auction selling by Italy and Spain, where the former sold six month notes at the highest yield in almost three years while the later auctioned 2.89 billion euros of three-month bills and six-month securities.

The European common currency is still benefiting from last week’s upbeat announcement which included the launch of second bailout forGreeceas well as other measures, yet concerns over theU.S.debt limit issue offset optimism that prevailed in markets the previous week.

On Tuesday, the euro area will release M3 money supply at 08:00 GMT, yet the report is expected to have slight or no effect on the pair’s movements, where the direction may be gained from the general sentiment in the market which is currently focusing on theU.S.debt problem.

At 09:30 GMT, KoF Swiss leading indicator which is estimated to retreat to 2.10 in July from the preceding 2.29 will be available.

EUR/CHF Technical Analysis July 26, 2011

The EUR/CHF pair fell on Monday as traders rushed in and bought the Franc against all currencies. With the debt issues in America and Europe, there is little surprise in this pair falling. Add in the fact that the downtrend has been so strong over the last few years, and there is no way to buy this pair. We sell rallies and new lows as well. The 1.18 area should serve as massive resistance should it be tested. A break of the 1.15 level is trying to act as support, but since it has already been violated – it shouldn’t surprise anyone if it fails.

EUR/CHF Daily Fundamental Analysis for July 26, 2011

Despite the announcement of a new bailout package for Greece last week in addition to new measures launched to halt the spread of debt contagion to the region’s highly indebted nations, worries returned once again to the market on Monday with the downgrade of Moody’s to the Greek credit rating to junk as the aid package included voluntary participation of private sector investors which is considered a selective default by rating agencies.

Meanwhile, eyes are on the debt woes in the euro area and U.S. with more focus on the U.S. debt ceiling issue as the failure of U.S. policy makers to reach an agreement regarding the raise of the $14.3 trillion debt limit ignited fears the world’s no.1 economy will lose its top credit rating and may face default.

The jittery situation sparked demand on the Swiss franc and other safe havens at the expense of high-yielding currencies.

On Tuesday, as of 06:00 GMT, the Swiss economy will release UBS consumption Indicator for the month of June, yet the release is expected to have slight impact on the pair’s movements, while the euro zone lacks fundamentals.

However, investors will keep tracking any development from theU.S.where further delay amongU.S.policy makers is expected to push the EUR/CHF to the downside and the opposite is true.

EUR/CHF Technical Analysis July 25, 2011

The EUR/CHF pair rose during the Asian session on Friday, but was quickly turned around by the Europeans, and to a lesser extent, the Americans. The pair is decidedly bearish, and the day’s candle is a shooting star – a classic sell signal. Add to that the fact the candle is right at the 1.18 resistance level, this pair looks vulnerable. In fact, all XXX/CHF pairs do after the day’s session.

EUR/CHF Technical Analysis for the Week of July 25, 2011

EUR/CHF rose this past week, but failed just above the 1.18 level. It should also be mentioned that the Friday candle was a shooting star, so it appears that there is trouble ahead for this pair. This isn’t a surprise, just look at the last 4 years or so. The down trend is intact, and shows no real signs of slowing down. A break of the lows on Friday gets us selling again.

EUR/CHF Weekly Fundamental Analysis for July 25-29, 2011

A very volatile week ended for the EUR/CHF pair after swissy managed to rally to a new record versus the euro on the back of the prevailing debt woes.

To the end of last week the fears started to ease about the outlook for the euro area and the debt crisis which might help the euro this week recover some of the losses after ending with weekly gains last Friday versus the franc.

The euro area leaders finally announced a new bailout for Greece around 159 billion euros alongside extending the maturity on the EFSF loans to 15 years and cutting the interest to 3.5%. Also, the leaders expanded the scope of EFSF providing credit lines to states preemptively before they are forced to ask for assistance, also allow loans to governments to recapitalize banks and above all allow the ECB to intervene in the bond market if deemed necessary.

We saw the initial reaction positive on the market with the minimal invasive involvement of the private sector, yet they will still amount for nearly 50 billion of the bailout for Greece as the rest 109 billion will be covered by the euro area and the IMF.

This week will be about the assessment of the banks involvement as they write-down Greek debt as part of the bond buyback program. Fitch said that Greece will be under interim default and will soon return to a low investment-grade rating.

Still, the jitters will prevail as the bond buyback program starts and new debt is issued to replace the write-downs for banks which will include the interim default status and that keeps swissy still favored for more gains, yet for now the euro seems to be enjoying better odds with the contagion risk most importantly lower and that is the focus for the week.

Other news from the euro area and the Swiss economy to affect the pair this week:

Monday July 25:

Both nations are not due to release any fundamentals as the market sentiment will control the movement and will continue on the reaction to the emergency euro summit resolution and the debt ceiling developments in the United States as they will define the sentiment in the market and the trend for the pair.

Tuesday July 26:

Germany will start the day at 06:00 GMT with the Gfk Consumer Confidence Survey for August where the index is expected slightly lower at 5.6 from 5.7.

The Swiss economy will release the UBS Consumption Indicators at 06:00 GMT for June and whether the index improved from May’s 1.91.

Wednesday July 27:

Switzerland will start the day at 06:00 GMT with the KOF Swiss Leading Indicator for July and expected to slow to 2.10 from 2.23.

The euro area will start the week with the M3 Money Supply for June at 08:00 GMT, where the three month average is expected slightly higher at 2.3% from 2.2% and in the year to June it is expected to hold steady at 2.4%.

Germany is due to release the preliminary CPI estimate for July. Inflation is expected to have moved higher with 0.3% monthly gain following 0.1% and to hold at 2.3%. In EU Harmonized terms the index is expected to rise 0.3% on the month following a flat reading in July and on the year to hold at 2.4%.

Thursday July 28:

Germany will start the day at 07:55 with the jobs report for July. Unemployment change is expected with a drop of 17,000 improving from 8,000 thousand added in June. Unemployment rate seasonally adjusted is expected to hold at 7.0%.

Thursday is the euro area confidence day with the report due at 09:00 GMT. The Business Climate Indicator is expected to slow to 0.84 from 0.92, Economic Confidence expected to drop to 104.0 from 105.1; the Industrial Confidence expected also lower to 2.0 from 3.2 and Services Confidence to 9.4 from 9.9. The final estimate for Consumer Confidence is expected unrevised at -11.4.

Friday July 29:

The euro area will end the week at 09:00 GMT with the July CPI flash estimate where inflation is expected to have held steady at 2.7%.

EUR/CHF Daily Fundamental Analysis for July 25, 2011

The EUR/CHF on Monday is expected to start a new volatile week after ending last week bullishly following a new record high for swissy versus the euro.

The debt crisis has been the main source of haven demand for swissy and the progress seen last week is still not full cure to end the crisis in the euro area as the market remains thirsty for more details and the slowing global recovery remains more downside pressure on the area.

The euro area leaders announced a new bailout for Greece around 159 billion euros alongside extending the maturity on the EFSF loans to 15 years and cutting the interest to 3.5%. Also, the leaders expanded the scope of EFSF providing credit lines to states preemptively before they are forced to ask for assistance, also allow loans to governments to recapitalize banks and above all allow the ECB to intervene in the bond market if deemed necessary.

Yet the market remains jittery especially with the pressure on the private sector and bond holders. Banks might endure as much as 20 billion euros in write-downs of Greek debt as part of the bond exchange and debt buyback program and that will be the focus for now to see more details of the plan.

We still see the jitters easing slightly which will help the euro rise versus swissy and regain some lost momentum yet the bank losses and interim default status on Greece will keep the upside support for swissy evident.

EUR/CHF Technical Analysis July 22, 2011

EUR/CHF slammed into the 1.18 level on Thursday as trader sold the Franc and bought the Euro across the board because of suggestions that the Europeans were coming to an agreement to stem the risk of contagion in the debt markets. However, the level has held, and the 1.18 – 1.20 levels are expected to be heavy. The other risk to this rally is that the agreement in Europe hasn’t been announced in its particulars as of this writing, and if it is something the markets don’t like – this thing falls quick. We still like selling, but need to see a bearish candle first.

EUR/CHF Technical Analysis July 21, 2011

The EUR/CHF pair fell on Wednesday, but regained much of its losses later in the session. The pair is most certainly bearish, but the last couple of days have been quite the opposite. The truth is that these rallies are dangerous to buy into as the slightest piece of news will continue the trend. The rally is more than likely heading to the 1.18 to 1.20 zone – an area that should provide a lot of resistance, which is exactly where we like to sell on weakness.