Archived IMT (2010.08.31)

EURCHF HITS FRESH RECORD LOWS at 1.2936 less than a day after SNB president said the cenbank is ready to intervene again. There are a few obstacles to any durable bounce in EURCHF; i) the Swiss franc is strong to the extent of dragging the rising USD down to 8-month lows at 1.0230. Chartists must look at the WEEKLY USDCHF to notice the obvious Head & Shoulder formation, suggesting USDCHF PARITY well before year-end. I have long said in my website that the franc is NOT the currency to sell against the USD.; ii) EUR weakness has also broadened overnight, which complicates the talks of any meaningful boost to EURCHF. Why would the Swiss National Bank stand out as the only central bank to intervene after the BoJ decided to back off? Why would the SNB risk another money-losing intervention, especially as the intensifying risk aversion in global markets will continue to boost CHF. Regardless, I see more chances of SNB stepping in this week below 1.2880 than the BoJ, but keep in mind SNB has usually intervened in Europe session and not in Asia. Another way of measuring the CHF is so strong that the strong $USDX is at 8 month lows vs CHF. Since both JPY and CHF are soaring in Asia, WATCH CHFJPY for the BATTLE OF THE BIG BOYS, to gauge which of the strong currency to likely post further advances against the shaky European and commodity currencies. AUDUSD to be impacted by the weeks PMI data from China as well as the array of US figures, targeting 0.8860 and 0.8820s, with resistance capped at 0.8970.