EURCHF Long
The pair has battled its way out of a multi-daily insidebar . EURCHF short exposure has reached extremes. Mainly due to political turmoil in Europe. As these negative effects are fading off the headlines. The short side is extremely vulnerable to a squeeze.
Recent Swiss data has been somewhat disappointing against a strengthening EZ backdrop. Furthermore, sight deposits indicate SNB intervention actively devaluing CHF.
The risk to the trade
Should Italian turmoil pick up in the near term and threaten Euro stability. The likelihood of a resurging CHF is on the cards.
There is a great chance 1.20 could get revisited. In the short term, however, there are supply bumps on the way. We’re anticipating accelerated short covering to push the pair up.
Risks of Reversal:
Skewed to upside
Spot Probability – Option
Skewed to upside
