Is The SNB Losing It’s Grip On The Peg?

Despite an outwardly fierce determination to put a floor on the EUR/CHF cross, recent price action suggests the SNB may be losing it’s grip on the peg. There is some evidence on the charts to suggest this, but the main reason behind recent moves is quite simple: I believe the euro is being abandoned in favour of every other currency. The euro’s future is uncertain. Even more uncertain is what, if anything, the Europeans intend to do about it so naturally no one wants the euro. If/when some of the weaker peripheral countries drop out of the single currency then there’s no doubt the euro will be the better for it. But until then…

If a broken CHF peg coincides with a greater “risk off” environment then many XXX/CHF charts could be in for a real battering as they are looking very overbought on weekly charts.

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