Currently, forex traders should look at the Swiss Franc. Exactly a week ago on August 5th, the Euro vs. Swiss Franc (EURCHF) pair reached its lowest level since mid 2017 at 1.0863 (low left of chart clearly visible). Thus, the Swiss Franc had strengthened more and more. Then in the last five days there was a small pause in the upvaluation race of the Franc.
The Swiss Franc is gaining in value – is it banging over the recent high?
But now it goes on. Especially now that the uncertainties in China and Hong Kong are increasing, investors are reflexively looking for “safe havens” such as the Swiss Franc. Currently at 1.0881, the Swiss Franc is only a few pips away from overflowing its high against last week’s Euro (falling EURCHF). Chart-wise, there is a lot of downward space in the chart.
Is the SNB already intervening?
But be careful! The further the Swiss Franc now rises, the greater the risk of massive intervention by the Swiss National Bank (SNB). The Swiss financial press is virtually certain that the SNB has already intervened in recent weeks. In other words, it is selling Francs against the Euro and Dollar to weaken them. According to various opinions, this can be clearly seen from the volume of sight deposits reported by the SNB, which have risen significantly in recent weeks (here are the most recent figures). But let’s be honest. If the SNB has really intervened, it has had little to no success in recent weeks.
The upward pressure exerted by investors fleeing into the Swiss Franc is still too strong. The SNB would have to be really strong against this, with large volumes! And there is a good chance that it will suddenly be able to counter this. So speculation on a further rise in the Swiss Franc is in full swing. As a trader, however, you should always bear in mind that the likelihood of a SNB bazooka will steadily increase as the Franc strengthens!