EUR/CHF and USD/CHF have rebounded strongly in the last two days after both posted new record lows on Monday morning. The prospect of further delays in both EZ negotiations regarding a 2nd Greek bailout and in US debt ceiling talks was the driver behind the surge of CHF buying. Now that some hope has returned to both sets of talks, we are seeing CHF short covering emerging. Both EUR/CHF and USD/CHF have fallen a long way so if serious short-covering happens, we will see big rallies in both pairs.
- EUR/CHF: I’d play 1.1500/1.1750 range in the short-term and the next big move will depend on the outcomes of the talks
- USD/CHF: Short term range looks like .82/.83
