Forex: EUR/CHF strengthens to 1.2250

The Swiss franc is trimming Friday’s losses, dragging the pair from levels around 1.2280/90 to the current region at 1.2250/55, as risk aversion continues to prevail amongst traders.

Despite last week’s strong GDP data from the Alpine economy, the inflation and the exports continue to tick lower. This situation motivated SNB’s T.Jordan to confirm once more the cap in the exchange rate would remain, considering the franc a highly overvalued currency at the same time. “We expect the SNB 1.20 EURCHF floor to remain throughout this year. Thus we think investors should continue to look for opportunities to sell the franc especially against the dollar”, commented M.Mohi-uddin, analyst at UBS.

At the moment, the cross is retreating 0.07% at 1.2257 and a violation of 1.2230 (low Mar.1) would bring the psychological level at 1.2200 and finally 1.2188 (low Feb.28).
On the upside, resistance levels line up at 1.2289 (high Mar.1) followed by 1.2300 (psychological level) and then 1.2321 (MA30d).