FX.co ★ Global macro overview for 20/09/2018

The Swiss National Bank, in line with expectations, kept interest rates unchanged at the level of -0.75%. In the statement, the bank reiterated that the franc is the currency of "inflated valuation" and that it has recently strengthened considerably. SNB intends to be active on the currency market if it deems it necessary, although it notes that the situation on the currency market is unstable. In general, the statement does not suggest that the SNB should adopt a more aggressive attitude in counteracting appreciation of the franc.

Let's now take a look at the EUR/CHF technical picture at the H4 time frame. The market accepts the statement calmly - EUR/CHF went slightly higher to 1.1315 after the data was released, but the volatility was not increased dramatically. The local high was made at the level of 1.1330 and since then the price is in decline as the 50% Fibonacci retracement level is still capping the bulls. The local low was made at the level of 1.1270 and any breakout below this level will be considered bearish. Please notice the overbought market conditions are indicating a possible pull-back can occur any time now.