FX moves by SNB intervention

Written by Research | 05 February 2010

Most affected by the SNB move!

With the Swiss National bank's presence and intervention on the Asian trading session indeed have much influenced the EUR/CHF cross trade. By making a whip-lash price swing that have obviously taken out a lot of specualtive positions in the market.

This has always been the case and coming as a surpirse that would halt the direction of the EUR/CHF from a low of 1.4557 with a high price of 1.4848. With the trading range of 291pips in early trading sessions have sparked a cushion for the USD/CHF, as it is currently working at the 1.0721in line with the continued strength of the US Dollar. The speculative outlook still remains the smae as of this writing.

The same scenario is happening except for the presence of the Bank of Japan where they now simply try to talk their currency higher or lower by verbal intervention instead of actually intervening in the Forex market. The key cross rate of EUR/JPY is the counterpart of the EUR/CHF and had dragged the USD/JPY lower ahead in the previous American session as it led the trades back to the 88.54 low price levels. It is currently working at 89.50 as of this writing with a slight recovery for the week ending February 5.

This observation may not be present at all times as it would be difficult to pin-point the currencies performances not unless such comparisons are made in one big picture frame. Some traders and strategists may and may not agree with this strategy or analysis, but by being able to identify such correlationship as to why such price behavior happens in the market at certain periods of trading. A variety of trading approach should always be included in the mix as there is no such thing as a one size fits all in trading the foreign exchange market. As some do trade one currency at a time due to funds allocated for investments because most trades made by speculative investors in the retail market tends to be only for a shorter period of time. And that is also the very reason why it is important to understand the intricacies involved while trading this volatile market.

Although, size does matter; the basic trading philosophy should be established first as to make investing in Forex trading work. For there are a lot of those traders and investors simply try to ride on a trend but more often than not, gets stopped out even if they have made their limit orders and stop loss orders in a more tolerable price range but still it happens. And a clear costly example is the price movements of the EUR/CHF, EUR/JPY against the other two majors of the USD/CHF and the USD/JPY. So to determine a strategic plan of action we have to base them from such chart comparisons that we have provided with this article. Consider all possible angles before making any rush decisions to buy or sell any particular foreign currency.