EURCHF is currently trading at 1.2057, its lowest level since December 2012 and as we all know the Swiss Franc is currently pegged to the Euro.
Following legislation by the Swiss National Bank (SNB) in 2011 this particular currency pair has been trading in a fairly tight range, they have expressed their desire not to allow CHF to strengthen too much against its more influential neighbour thus creating a unique situation of, in effect, placing a price floor of 1.20.
In the past 18 months or so we have seen a steady revision towards this base after reaching a recent peak in May 2013 of 1.2650 so could this be a great level to step into the market? Will the synthetic floor hold firm or will dynamic market forces take hold and dictate its own course, all will be revealed in the coming weeks.
Keep an eye out for the market to start showing signs of divergence, this could be the sign of a reversal to begin to happen.
The dealing desk at 888 markets will certainly be keeping a keen eye on the situation so be sure to stay tuned for future further analysis.