As was expected the USD/CHF run north was halted into the 1.2480 area yesterday and overnight the pair has consolidated the run higher. Into European trading and 1.2480 continued to cap USD/CHF but with markets light ahead of the ECB the pair has easily been propped by the previous 1.2440 base leaving spot tight inside a 1.2440/80 range.
Any break of 1.2480 will eye the 1.2500 mark but intraday and much will depend on the tone set by the ECB's Trichet. The ECB is not expected to hike today (12:45 GMT) but the tone of the Presidents rhetoric will be key to the Euro attempting to bounce. Should any Feb hike be implied then EUR/USD could rally and this will weigh on USD/CHF with 1.2400 then coming back into view.
Despite the SNB being rumoured to be selling [EUR/CHF] across various platforms the cross remains buoyant. Bulls still eye the 1.6175/80 exotic options and the 1.6200 barriers on the topside while 1.6150 props. Model & leveraged players flipped to long positions in [CAD/CHF] in the break above 1.0625 with 1.0650 now eyed en-route towards a test of the 1.0690 area.
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