• EUR/CHF remains range-bound and subdued, but its behavior is critical for broader Swiss franc positioning.
• Support near 0.92 is closely watched, as a breakdown could trigger Swiss National Bank intervention and broader franc weakness.

The euro initially tried to rally a bit against the Swiss franc during the trading session on Friday but is still fairly stagnant. This is a pair that you need to watch very closely because it will have a major influence on the rest of the Swiss franc pairs. This pair isn't the most interesting pair to trade most of the time, but it does give you an idea as to whether or not the Swiss National Bank is ready to jump into other currency pairs, ones that move a little bit more like the British pound against the franc or even the US dollar against the franc.
 

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Range Structure and Central Bank Sensitivity
 

As things stand right now, you can see that the 0.92 level remains the floor in the market. In fact, we were somewhere near there when Swiss National Bank members started talking about watching the Forex markets very closely. We are in the process of perhaps trying to find a floor here, but I think we stay in this range between 0.92 and 0.94 for quite a while.

After all, the process of turning one of these slow-moving currency pairs around is a process. It's going to take some time. The 0.93 level makes sense as a bit of a magnet for price. It's fair value, if you will.

So with all that being said, I'm pretty neutral on this pair, but I would point out that the reason I'm doing this analysis is that anything denominated in Swiss francs, you need to be aware of how this is trading. Right now, it's not trading too badly, but if we break down below 0.92, look out. The Swiss National Bank is going to get involved, and everything is going to get a big push higher against the franc if officials are to be believed. My experience in the last 20 years has taught me there are two central banks that will intervene. One is Japan. The other is Switzerland.

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