The EUR/CHF experienced very choppy price action today, but ultimately ended the day higher after the Swiss National Bank (SNB) announced that they would be leaving their 3-month Libor target range unchanged at 0-0.75 percent, as expected, with the aim of bringing the rate down to the "lower part of the range" near 0.25 percent. The market-moving part, though, was that the SNB said they would "take firm action to prevent an appreciation of the Swiss franc against the euro.," The SNB also reiterated that they would continue to "provide the economy with a generous supply of liquidity and to purchase Swiss franc bonds with the aim of reducing risk premia on long-term bonds issued by private sector borrowers." Indeed, the central bank is ultimately concerned that there is a "not inconsiderable" risk of deflation, but their GDP growth forecast for 2009 has not changed from previous expectations for a real GDP decline of 2.5 - 3 percent. Looking ahead, EUR/CHF could simply remain range-bound, as it has for the past few months, but there are some notable levels to watch. For resistance, there is the 200 SMA at 1.5161 and a falling trendline at 1.5235. For support, we have the psychologically important 1.5000 mark.
