Philip Salter
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EUROPEAN officials are preparing to announce a comprehensive solution to the “peripheral problem”, with an expansion of the existing European financial stability facility (EFSF). Given the market focus on the issue, it is likely that a large proportion of market participants are speculatively short on the euro as a hedge against default risk becoming market news. The comprehensive set of measures set to be announced on 25 March have a decent chance of inducing euro buying, as the European outlook becomes a little clearer and more certain. This coming Friday’s gathering of EC ministers may not deliver anything concrete, but their comments should raise volatility in euro pairs. Alpari offers a spread on the euro-US dollar of $1.39192-$1.39208.

Dealers have reported a noticeable shift from petrodollar accounts away from the Swiss franc towards the euro recently and the euro-Swiss franc seems to have put in a solid base around SFr1.28 from which to press forward. Support is currently coming from the 50 day exponential moving average around SFr1.2920, with the 100 day moving average currently keeping a lid on things around SFr1.3035. If it can break this level we could see it hit SFr1.320 pretty soon. Spread Co offer a spread on the euro-Swiss franc of SFr1.2975-SFr1.2978.

Sticking with the Swiss franc, the almost relentless slide in US dollar-Swiss franc may have turned a corner yesterday with the dollar fighting back. The US dollar-Swiss franc finally broke through the SFr0.9325 resistance (the lows from January and February) and at the time of writing was trying to get above its 15-day exponential moving average around SFr0.9344. A close above this level could well see it climb towards the SFr0.96 mark where longs should look to book profits. Spread Co offers a spread on US dollar-Swiss franc of SFr0.9346-SFr0.9349.