special study - chf/nok
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SPECIAL STUDYCHF/NOK Stresses in the Eurozone dominate near-term. Bijoy Kar, CFA
http://www.migbank.com/research/howard/2011-06-01_migbank_daily%20technical-analysis-report.pdfMIG BANK 14, rte des Gouttes dOr CH-2008 Neuchtel Switzerland
Tel +41 32 722 81 00 Fax +41 32 722 81 01 [email protected] www.migbank.com
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SPECIAL REPORT25 July, 2011
www.migbank.com
CHF/NOK Further near-term strength possible.
CHF/NOK is currently dominated by movements in EUR/CHF. This can beexplained by the range-bound nature of the EUR/NOK chart, as displayed
immediately to the left. Thus CHF/NOK is being driven by EUR/CHF.
EUR/CHF is heavily influenced by stresses in the Eurozone peripherycountries and in particular by Greece, Spain and Portugal. As the yields on
the respective bonds issued by these countries rise, we see renewed
weakness in EUR crosses generally, but in particular in EUR/CHF, as the
Swiss Franc is being used as a safe haven.
The two charts displayed to the left in the lower half of the page, show 10year Italian and Spanish government bond yields. We can clearly see that
both are trading close to the upper bound of the last 10 years range. Also
shown is the potential neckline of a longer-term reversal pattern, warning
of potential for yet higher yields. Should a continued rise materialise, we
can expect EUR/CHF to be pressured to the downside.
In fact a sustained break over 6% in both Italian and Spanish 10 yeargovernment bond yields will likely lead to a more lasting funding problem
in both of these countries, with risks then of a bank funding crisis to follow.
We will thus monitor these yields carefully and would advise any EUR/CHF
trader to do likewise.
EUR/USD
Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424
CHF/NOK
Generic Italian (left) and Spanish (right) 10 yr government bond yields,
Weekly chart, Bloomberg FinanceLP
EUR/NOK weekly chart, Bloomberg Finance LP
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SPECIAL REPORT25 July, 2011
www.migbank.com
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SPECIAL REPORT25 July, 2011
www.migbank.comBjioy KarTechnical [email protected]
14, rte des Gouttes dOrCH-2008 NeuchtelTel.+41 32 722 81 00
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