EUR/CHF jumps toward 1.1650, highest since SNB shock

• Spot at the highest since January 2015
• Key event ahead: ECB meeting (Thursday)
• CHF also losing ground vs USD 

The euro is rising sharply on Tuesday against the Swiss franc and also versus the pound, ahead of the European Central Bank meeting. 

EUR/CHF consolidates above 1.1600

The pair is up almost a hundred pips on Tuesday. Today started the day hovering around 1.1570 and it just printed a fresh high at 1.1656, the highest since January 2015, when the Swiss National Bank removed the 1.20 floor. 

The rally takes place ahead of the European Central Bank meeting. Market participants expect a taper announcement of the QE program: an extension but at a lower monthly pace. 

Analysts at Danske Bank expect the ECB to extend QE nine months at a pace of EUR30bn per month. “In our view, a larger scaling down of purchases would ease future QE implementation and higher reinvestment volumes of maturing bonds would also add to the monthly QE flows in 2018. Apart from a scaling down of QE purchases, we expect the ECB to make no changes to its forward guidance at the upcoming meeting.”

EUR/CHF is consolidating above the 1.1600 area that could add support for an extension of the upside. If the euro remains strong a potential target is seen at the historic 1.20 area. 

EUR/CHF Technical levels 

To the upside, immediate resistance might lie at 1.1655 (daily high), followed by 1.1700 and 1.1770. Between the last one and 1.2000, not much resistance is seen. On the flip side, 1.1600 is now a support, followed by 1.1565 (weekly low) and 1.1520.