No fear of Swiss gold rush – SNB action inevitable at 1.20 says UBS

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USB forex strategist Beat Siegenthaler says the gold initiative appears to have a low chance of success and that  we might get some clue of that at the next poll.

If the “yes” vote fades in the poll then the issue will fade ahead of the referendum he says. If the “yes’s” increase then we will likely see pressure on EUR/CHF.

Which ever way the vote goes he doesn’t see many scenarios where the SNB would remove the peg.

  • Removing the floor would require political discussions and a parliamentary decision
  • SNB unlikely to impose negative rates, unless gold vote goes against them but would be very cautious of doing so
  • SNB may hope that intervention is sufficient but says any big jump won’t last, until negative rates are introduced
  • Biggest impact could be on EUR crosses, bonds and equities rather than EUR/CHF
  • SNB may be forced to enter somewhere at or above 1.2010

EUR/CHF has made a new low today, by only a fraction of a pip I think. Yesterday’s low was 1.20218. Today it’s 1.20213. Makes all the difference to the charts don’t you know ;-)

forexlive petit

Read more: http://ow.ly/3ubnGk

Author: Ryan Littlestone, ForexLive

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Gold rebounds after sharp plunge to new low

Gold (daily chart shown below) has rebounded back up near key resistance around the major 1180 support/resistance level after having plunged to a new four-year low around 1130 late last week.

Prior to this new low, the precious metal had established a third test of the 1180 support level about a month ago in early October before bouncing. This followed earlier tests of 1180 support in June and December of 2013.

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Slightly more than a week ago at the very end of October, gold once again dropped down to 1180, but this time proceeded to break down aggressively below that key support level. The breakdown confirmed a continuation of the long-term downtrend extending back at least two years to October of 2012.

Currently appearing to back off from the noted 1180 level, this time as resistance, gold could potentially begin to target new long-term lows around the 1100 downside support level if it continues trading below 1180.

To the upside, in the event of any breakout back above 1180, the 1200 level should serve as a key resistance level further to the upside.

city index

Author: James Chen for City Indexhttp://ow.ly/3ubitu

@JamesChenFX

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EUR/USD En-Route To 1.20

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Mario Draghi defied the discontent and delivered a dovish message. EUR/USD is trading at the 1.2360 handle. What’s next for the single currency?

The team at Danske lays the potential path:

Here is their view, courtesy of eFXnews:

The ECB press conference today was clearly dovish in both Mario Draghi’s tone and the actual change in statement. The ECB now officially targets a balance sheet the same size as in early 2012 (Draghi said March 2012 during the Q&A), which is effectively a target of EUR3trn. This is an increase of EUR950bn from today’s level.

So, Draghi did it again. He speaks out of the manuscript initially – this time mentioning the size of the balance sheet in 2012 as a soft target without backing from the Council – only to get it into the manuscript subsequently.

The ECB was clearly dovish at today’s press conference. EUR/USD fell 1 figure on the press conference and we believe it has further to fall. In our view, it also reflects that the market is very keen to buy the USD and sell the EUR and is using any opportunity to express this view. We forecast EUR/USD will reach 1.20 in six months time.

forexcrunch

Source: http://ow.ly/3tUusd

Author: Yohay Elam for Forex Crunch

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Supports & Resistances

AUDUSD

0.8614; capping at 0.8627 after rally from 0.8553

Sellers  0.8635 0.8650-60 0.8685 0.8700 0.8725-35 0.8750 

Buyers  0.8600 0.8575-85 0.8550-60 0.8525-30 0.8500

USDJPY

114.62; Nikkei-led drop in Asia from 115.52 .

Sellers  114.75-85 115.00 115.25-35 115.50-60 115.75-85 116.00

Buyers 114.40 114.20-25 114.00-10 113.75-85 113.50 113.20-25 113.00 112.75-85 112.50 

EURUSD

1.2500 after an early fall; ECB meeting later on

Sellers  1.2515 1.2525-30 1.2550-55 1.2585 1.2600 1.2620-25 1.2650-55 1.2670 1.2685 1.2700

Buyers  1.2480-85 1.2470 1.2440-50 1.2425 1.2400-10 (barrier 1.2400) 1.2385 1.2350

GBPUSD

1.5985 in a tight range; 1.5950 holding dips; BOE on the agenda. Sellers still above 1.6000

Sellers 1.6000-10 1.6025-30 1.6040-50 1.6065 1.6080-85 1.6100-10 1.6150-60

Buyers 1.5950 1.5920-30  1.5900 1.5885 1.5865 1.5850 1.5830 1.5800-10

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EURUSD: Daily pivots

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EURUSD has managed to ease off from the lows at 1.2466 regions and has been pushing higher. However, these minor gains are likely to be capped near the major support turned resistance level between 1.255 and 1.252 levels. We also notice that the pair has made a small bearish continuation flag pattern, hinting to more declines. A break and possibly a retest of the flag pattern is essential to set the bias. However we notice the support region at 1.24665 which could possibly hold any further declines. The range created between 1.255 and 1.24655 is likely to play out until the ECB’s meeting later this week.

Source: Forex Crunch http://ow.ly/3tLb6t

Author: John Benajmin http://ow.ly/3tLbqD

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