In the quarterly rate decision, the Swiss National Bank reaffirmed the decision to put a floor of 1.20 under EUR/CHF. The move boosts EUR/CHF which was getting too close to this floor.
It also indirectly pushed EUR/USD higher within the rising channel.
The huge Swiss intervention only had a temporary effect on EUR/USD when it happened more than a week ago. EUR/CHF even got relatively far from the floor, making way for EUR/USD to fall.
As Euro/Swiss got closer to the floor, a move upwards by the SNB (or by anticipation of a move by the SNB) was awaited. It now happens, and this indirectly pushes EUR/USD above 1.3750 once again. Serious resistance for EUR/USD is at 1.3838. This is still far. Support is at 1.3750 now.
The flat support and resistance lines have a smaller influence on EUR/USD now. The channel is of higher importance.
For more on EUR/USD, see the euro/dollar forecast.
EUR/CHF is currently at 1.2070, up from 1.2040 before the release of the statement by the SNB.
The statement by the SNB consists of tough language, similar to the wording of last week’s big move:
With these measures, the SNB is taking a stand against the acute threat to the Swiss economy and the risk of deflationary development that spring from massive overvaluation of the Swiss franc. Even at a rate of CHF 1.20, the Swiss franc is still high and should continue to weaken over time. If the economic outlook and deflation risks so require, the SNB will take further measures
In the statement released last week, they pledged to “not tolerate” the strength of the franc, and to buy “unlimited amounts” of foreign currency.
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