This has turned out to be very eventful day. Not only FED announcement is scheduled in a little more than an hour, with all its implications, real or imagined, but Swiss Franc pairs were very active again. Just few days after selling CHF in the open market, Swiss National Bank did it again. Or rather Bank for International Settlements was once again a seller on behalf of SNB. As far as I can tell, proximity of the 1.5000 level in EUR-CHF proved to be the trigger.
SNB refused to confirm that it was active in the market, but there is no escaping the fact that traders and market makers in the largest banks know where orders are coming from. Besides, nature of this move has “intervention” written all over it. Market behavior is unmistakable. Central markets tend to be cagey and evasive, if not secretive about their intentions, so we can’t expect to hear from SNB what they’ll do next. After all, it is not in their charter to facilitate speculative profits. However, if anybody had any doubt, this action should have proven that Swiss financial authorities are serious.
This proved to be good for my long term GBP-CHF trade. In fact, the move was so strong, I took partial profits. This will be discussed in more details tomorrow. Now it is time to update EUR-CHF trade from earlier on this week, which came to intended conclusion.
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Trade had non promising start, but today’s price explosion took care of it. I extended original target to 100 pips and it was reached today. Good result. Not ready for another trade in this pair right away, will wait for farther price development. Somehow I still remember USD-JPY interventions from few years back and how long it took to eventually move it up. If I see promising set up, another order will be placed, and if intervention happens it would be a bonus, like today. Hoping for SNB selling Franc again is not a good reason to trade by itself.
Yesterday I covered Yen crosses, namely AUD-JPY and NZD-JPY. Both of the sell orders were triggered, but I just closed them.
Honestly, I don’t want to sit on number of open positions during FOMC announcement. This is very late in the day for me, I don’t want to second guess myself. I closed NZD-JPY with a loss of 3 pips, and AUD-JPY for -21 pips. I will watch markets reaction to the statement and maybe do something at the top of that hour after news release.
Mike K.
You are right Mike, about my trade. I should be content. Traded a plan and it worked nicely. You must have caught most of that move with the standing trade.
I did. it will be explained in the next post.
Well, this intervention was something else. It made for about 600 pips daily range in gbpchf. Some day!
You made a good move getting out of Yen pairs before the ennouncement. But the news didn’t cause much move. Wonder why?
Swiss National Bank is acting more and nore often. We should expect another intervention soon.
Stan, in my view FED announced nothing new, hence no moves.
GR, it is almost impossible to predict when central bank will act again. You can not count on them to move the market for you. For what we know they may sell more Franc tomorrow, or 3 months from now. Or not at all.
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