Swiss National Bank, CHF
A message from Swiss National Bank was sent to markets last week which was that it may take monetary policy measures at any time between regular assessment dates if circumstances require that. Last meeting of SNB on 16th June surprised markets and hiked interest rates by 50bps from record low of -0.75% to -0.25%. There is no schedule meeting of SNB until 22nd September this year. The Central Bank cited increased inflationary pressures as the reason for the rate hike after CPI reached a high of 2.9% YoY in May which was the highest in last 14 years. In June, inflation rose to 3.4% YoY and with CPI for July to be increased today, the SNB knows it may have to act inter-meeting if inflation, continues to rise. The expectation for the July SPI is 3.5% YoY. If the data comes in hotter than expected, be on the lookout for another rate hike before next meeting.
EUR/CHF is trading at its lowest level since Jan 2015 if we look at the weekly timeframe, when SNB dropped the peg of the Swiss Franc to the Euro. The last weekly low was 0.9776, which happened the week after the peg.
Since mid-June EUR/CHF is moving in a descending order. Although price had flirted with equality on 5th June which moved the pair to lower the 1.0000 without looking back. On 26th July, EUR/CHF broke below 0.9776 on weekly level and closed at its lowest level since 15th January 2015.
EUR/CHF is getting stronger in a symmetrical triangle if we look at a 4 Hour chart. The expectation is that price will break out of a symmetrical triangle in the same direction as it was moving before the consolidation. In this case, the pair could continue lower. On 29th July 0.9700 was the first support and then the bottom of the longer-term channel near 0.9640. Below there, the bottom drops out, with no support until January 2015lows near 0.8630. Downtrend going in same trendline of the short-term triangle near 0.9755. Above there, price can move to the highs of 28th July at 0.9805, then top the trendline of the longer-term downward moving channel near 0.9840.