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USD/CHF tumbles after ECB and Draghi

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 10, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    USD/CHF reversed sharply and dropped from 1-month highs to 2-week lows in a few hours and remains near the lows, holding bearish momentum.

    ECB triggers volatility

    After the ECB announced a rate cut in all rates, the Swiss franc tumbled in the market and USD/CHF jumped to 1.0090, reaching the strongest since February 3. But then, during Mario Draghi press conference it reversed sharply (in line with EUR/USD that made a dramatic rebound).

    The pair dropped more than 200 pips from the highs and recently reached 0.9854, the lowest level in two weeks. The decline stopped slightly above the 0.9850 area, that is the immediate key support to take into account (Feb 24 low).

    The rebound int the euro and in the Swiss franc was triggered after Draghi said that he does not anticipate further rate cuts. Markets now might be considering that the ECB has reached a limit regarding its purchase program and interest rates, at least in the short-term, removing more easing expectations.
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