Bull or Bear on USDCHF?
Confeoderatio Helvetica Franc (CHF) - aka Swiss Franc, has strengthened considerably against Euro and still threatening to strengthen. SNB has time and again intervened but not strong enough to tell the Shorts to cover.
Why is CHF getting strong?
There are two schools of thought. One says CHF is driven by its safe-haven status (since SNB has great foreign reserves and the Swiss govt debt is near 40% of GDP, compared to other nations where debt is close to 100%). The other school says many of the foreign debt issued by Swiss banks may go delinquent or refinanced in local currencies, forcing short squeeze and further strengthening CHF.
Regardless of how the experts differ, they seem to believe CHF will get stronger (USDCHF bearish).
Of course, there is the contrarian view too. When everyone jumps on the same side of the trade, is that sooner or later, all those people are punished for their herding mentality. Hence, taking short position in EURCHF/USDCHF etc may not be advisable at this time, since SNB has stated that they have unlimited resources to intervene in the fx market.
The other point to note is USDJPY. Risk aversion has strengthened the benchmark currency Yen, much like CHF. Therefore, it is possible both were driven by risk factors and not economic fundamentals. If so, best to watch out for the behavior of USDJPY and whether a weaker Yen also leads to weaker CHF.
i think we have a situation here.
til where (what price) CHF can extend its gain without hurts its own economy. Don't forget that we are in a strange state in global finance, usually this is an indicator that some currencies will be safe haven, and other dangerous.
CHF AUD NZD and JPY are this kind of currencies at this moment. So what currencies will be elected by investors all over the world? Dollar? Pound? i don't think so this time.
But, are we at the end of recession? or we are only into a leg? supposing that is an end, we are at the biggest opportunity to buy very cheaper for thousands of pips some crosses like CHFJPY, GBPJPY, USDJPY, USDCHF, EURCHF
in 40 years the prices never go so low!!!! (just one time) many of the crosses are making the historical lowest prices ever....
What you think?....
I start to buy and cover at all prices availables with some logical hedges once i have some green pips... one of the pairs are the USDCHF, obviously.