Markets had a very interesting development yesterday. It was this wild swing in Swiss Franc, attributed to an intervention. Interestingly enough, it is said to be not Swiss National Bank stepping in, but Bank for International Settlements acting on behalf of SNB. Most people find something like this confusing- why would one bank do it for another? It is not unusual when central banks try to impose their will on the market. In markets as large as currencies it takes a focused effort and a lot of money to change major trends. And one more thing- time. They need help sometimes.
Back in late 2004, early 2005, when Bank of Japan was desperately trying keep Yen weak, we know of at least 2 interventions by FED acting for BoJ. Details were not disclosed to the public. Earlier this year we had number of statements from all corners of the world about determined and organized intervention by all of the major CB’s. So, it really should be no surprise that these kind of things happen.
In case of Swiss Franc, the focus is apparently EUR-CHF. By all accounts, the 1.5000 level seems of importance. This will be put to a test again, because EUR-CHF is rapidly returning there. SNB has already acted twice, or trice if we include yesterday. We can expect for it to happen again, but here is catch; according to Swiss authorities “they do not necessarily have a specific intervention level in mind”. One more warning to the markets to not bid CHF up.
Even though the intervention supposedly targeted EUR-CHF,  all Franc pairs experienced wicked moves. GBP-CHF sold off sharply but recovered just as promptly.

I’m glad to see this cross is right back in 1.7800. Also, I hope SNB intervenes again and often, which would help my long term GBP-CHF trade. It will take some time, given my lofty goal.
Currently other trades are a little more important, including AUD-JPY sell. This trade is proving to be a difficult one.

Entry happened as planned at 75.90, but that is also when the plan came apart. In yesterday’s abbreviated post I mentioned a new development. Here is the snapshot including the “development”. Price was running away from me, and seemed to approach area of potential reaction. Previous high is at about 78.40, with 100 SMA, possible strong resistance, also in that neighborhood. I put another sell order at 78.00, same size as original trade. It was filled earlier today.

Price managed to stay under previous high, which generally is positive for short position. This second trade also has a very small risk, 85.50.  My intention here is to first see how markets close and then open on Sunday, but most likely if I see 77.00 level, both trades would be closed for about a break even outcome. Other JPY pairs are giving mixed signals, so I’ll have to review all the charts and get a better handle on things. TGIF.

Mike K.