The Franc has been forced onto the back-foot into European trading as the Dollar began retracing the losses it incurred late last week. USD/CHF has now taken back over 75% of the Thursday losses and into North American trading the rally to 1.2675 is currently consolidating. Technical retracement levels weighed in Europe but ultimately these proved little more than bull targets and stalling points amid the USD/CHF rally.
The break above the 50.0% Fibo at 1.2660 (from the sell-off from 1.2773 (October 13th high) to 1.2549 (October 20th low)) now has bulls looking for a run to 1.2690 (the 61.8% Fibo of the above move. Into North American trading and there is little fresh event-risk in the pipeline with decent bids noted on a pullback to 1.2645/50.
Elsewhere, the latest CME data has shown that speculative Dollar long positions have rallied to their highest levels since December 05. In the week to last Tuesday they hit USD 8.9Bln. The ratio of short CHF & JPY positions highlights the continued appetite for carry trades financed by lower yielding currencies like the Yen & the Franc.
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