Daily Winners and Losers

Euro_Eyes_1.4000_Swiss_Franc_To_Hold_Narrow_Range_body_ScreenShot003.png,

CurrencyLastHighLowDaily Change (pip)Daily Range (pip)
EURUSD1.39351.39741.383371141

Euro_Eyes_1.4000_Swiss_Franc_To_Hold_Narrow_Range_body_ScreenShot005.gif,

The Euro continued to outperform against its major counterparts on Thursday as the European Central Bank talked up speculation for a rate hike in the first-half of 2011, and the single-currency may continue to retrace the decline from back in November as the near-term rally gathers pace. The EUR/USD remains 70+pips higher from the open after moving 112% of its average true range, and the pair may make a run at 1.4000 over the next 24 hours of trading as interest rate expectations accelerate. According to Credit Suisse overnight index swaps, investors expect borrowing costs in Europe to climb at least 100bp over the next 12-months, and speculation for higher interest rates should help to prop up the single-currency as the central bank shows an increased willingness to lift the key rate off the record-low. However, with U.S. Non-Farm Payrolls on tap for tomorrow, the exchange rate may consolidate going into the Asian trade, and the EUR/USD may struggle to hold above 1.3900 as the relative strength index falls back from overbought territory. At the same time, the euro could face headwinds going into the middle of March as the EU struggles to address the sovereign debt crisis, and the risk for contagion may bear down on the exchange rate as the governments operating under the fixed-exchange rate system face higher borrowing costs.

Key Levels/Indicators

Level/IndicatorLevel
November High1.4281
10-Day SMA1.3768
20-Day SMA1.3674
Daily RSI67
CurrencyLastHighLowDaily Change (pip)Daily Range (pip)
USDCHF0.93080.93240.92337291

Euro_Eyes_1.4000_Swiss_Franc_To_Hold_Narrow_Range_body_ScreenShot004.gif,

The Swiss franc fell back from a record-high, with the USD/CHF rallying to 0.9324, and the near-term correction in the exchange rate may gather pace going into Friday as it appears to have carved a bottom around 0.9200. The dollar-franc is 70+ points higher on the day after moving 86% of its ATR, but the rebound in the exchange rate may taper off going into the Asian trade as the pair fails to push above the 10-Day SMA at 0.9326. As the rally remains overbought, we may see the USD/CHF consolidate heading into the end of the week, and the exchange rate may revert back to the 240-SMA at 0.9272 as the pair struggles to hold its ground. In turn, the dollar-franc is likely to maintain a narrow range ahead of the U.S. employment report on Friday, but we may see a breakout in the exchange rate if payroll figures show a large divergence from market expectations.

Key Levels/Indicators

Level/IndicatorLevel
20-Day SMA0.9472
10-Day SMA0.9326
2011 Low0.9201
Daily RSI40

Upcoming Events

GMTImportanceReleaseExpectedPrior
8:00LOWForeign Currency Reserves (FEB)--207.9B