USD/CHF Cup and Handle, EUR/GBP Triangle Wait on Catalysts
- EURUSD daily MACD, Stochastics offering sell signals.
- EURGBP rebounds off of triangle support - no break yet.
It's difficult to dismiss the SNB's actions yesterday as anything other than a precursor to ECB easing in January, since the SNB has acted as an adjunct branch of the ECB ever since the EURCHF Sf1.2000 floor was established in September 2011.
After yesterday's surprise SNB rate cut announcement, it's not shocking then that today news reports have filtered out that the ECB is attempting to create a QE plan that Germany might find palatable: peripheral national central banks setting aside additional capital to serve as a buffer incase the ECB's bond buying goes awry.
Regardless, a test of the yearly low in EURUSD now seems likely, even if it's less than half a percent away. Concurrently, the longer-term downtrend, pointing to the base of the rising wedge in 2012 at $1.2041, would be taken back into consideration as the dominant technical theme in the market.
--- Written by Christopher Vecchio, Currency Strategist
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