In the accompanying statement, the SNB said that 'the signs of an economic recovery are becoming more tangible. The improvement is beginning to assist the Swiss export sector, while the domestic sector is performing well' while noting that 'the revival remains fragile and is associated with uncertainties'.

The SNB expects real GDP will grow +1.5% y/y in 2010 from 'between 0.5-1%' in December's projection. over, inflation will increase by +0.7% y/y (December: +0.5%) and then by +0.9% y/y (December: +1%), respectively in 2010 and 2011. What's more, the SNB noted inflation will reach +2.75% in 4Q12, indicating 'current expansionary monetary policy cannot be maintained throughout the entire forecast horizon without compromising medium and long-term price stability'.

Concerning currency intervention, the SNB restated it would prevent excessive appreciation of the Swiss franc against the euro as 'an appreciation of this kind would result in an undesired tightening of monetary conditions'. The pledge on intervention has appeared in SNB statement since March 2009 but the central bank has become more relaxed in allowing the franc to rise in recent months.

Swiss franc plunged to 1.068 and 1.4616 against the dollar and the euro after the announcement amid worries over intervention.

Since December 2009, the SNB has started draining excessive liquidity it provided to the market during global recession last year. In December, the central bank announced to stop buying corporate bonds and said it would prevent 'excessive appreciation' in Swiss franc. Monetary base has declined as a result. In January, the annual growth rate of M2 attained +16.5% or half the rate recorded just three months ago, while the growth rate of M3 was +6.1% as compared to +7.9% in November. That said further reduction is needed. While the central bank did not mention, we expect it will implement operations to raise the 1-week repos, which currently stays at 0.05%, in coming months.

Based on ActionForex.com Technical Outlook

Most recent candlesticks pattern : N/A
Trend : Down

Tenkan-Sen level : 1.4969
Kijun-Sen level : 1.5035
Ichimoku cloud top : 1.5180
Ichimoku cloud bottom : 1.5027

Original strategy :

Sold at 1.5040, Target: 1.4860, Stop: 1.5105

New strategy :

Exit short entered at 1.5040

Although the British pound retreated after intra-day rise to 1.5065, as long as the Tenkan-Sen (now at 1.4969) holds, near term upside risk is seen for another corrective rise and above said resistance would bring stronger rebound to 1.5100, however, 1.5180-97 (current level of the Ichimoku cloud top and previous resistance) should hold and bring further choppy consolidation.

Below the Tenkan-Sen would suggest recovery from 1.4873 has possibly ended but break of intra-day support at 1.4947 is needed to confirm and bring another test of said support.

In view of this, we are exiting our short position entered at 1.5040 and look to sell cable again on subsequent recovery.

Based on ActionForex.com Technical Outlook

Most recent candlesticks pattern : N/A
Trend : Sideways

Tenkan-Sen level : 1.0738
Kijun-Sen level : 1.0743
Ichimoku cloud top : 1.0769
Ichimoku cloud bottom : 1.0751

Original strategy :

Sell at 1.0785, Target: 1.0650, Stop: 1.0850

New strategy :

Sell at 1.0785, Target: 1.0650, Stop: 1.0850

Despite intra-day fall to 1.0683, as dollar has recovered after holding above this week’s low at 1.0676, suggesting further consolidation within 1.0648-1.0810 range would take place and rebound to the Ichimoku cloud top (now at 1.0769) cannot be ruled out, however, indicated upper range should continue to hold, bring another decline later. Break of strong support at 1.0647-48 would confirm top has been formed earlier at 1.0899 and bring retracement of recent upmove to 1.0605-09 (38.2% Fibonacci retracement of 1.0130-1.0899 and previous support) and later towards 1.0563 (50% Fibonacci retracement of 1.0227 to 1.0899).

In view of the above analysis, we are still looking to sell dollar on recovery. Only break of resistance at 1.0889-99 would signal recent upmove has finally resumed and extend gain to 1.0939 (50% Fibonacci retracement of 1.1967 to 0.9910) and possibly 1.0970 before retreat.

Based on ActionForex.com Technical Outlook

Most recent candlesticks pattern : N/A
Trend : Sideways

Tenkan-Sen level : 1.3616
Kijun-Sen level : 1.3618
Ichimoku cloud top : 1.3609
Ichimoku cloud bottom : 1.3586

Original strategy :

Buy at 1.3565, Target: 1.3730, Stop: 1.3500

New strategy :

Buy at 1.3550, Target: 1.3730, Stop: 1.3485

Despite intra-day marginal rise to 1.3688 (yesterday’s high was 1.3680), lack of follow through buying and the retreat from there reinforce our view that further consolidation within recent range of 1.3530-1.3736 would take place and weakness towards the Ichimoku cloud bottom (now at 1.3586) is likely, however, renewed buying interest should emerge above indicated lower range at 1.3530 and bring another rebound later. Above 1.3705 resistance would extend gain to said upper range of 1.3736, however, above there is needed to confirm an upside break of this range and bring stronger retracement of recent decline to 1.3789 and later towards resistance at 1.3840/51.

In view of the above analysis, we are still looking to buy euro on pullback for such rally. Only below 1.3500/10 (approx. 100% projection of 1.3736 to 1.3530 measuring from 1.3705) would risk weakness to 1.3450 and possibly retest of 1.3433.

Based on ActionForex.com Technical Outlook

Most recent candlesticks pattern : N/A
Trend : Sideways

Tenkan-Sen level : 90.38
Kijun-Sen level : 90.07
Ichimoku cloud top : 89.72
Ichimoku cloud bottom : 88.80

Original strategy :

Buy at 89.80, Target: 91.30, Stop: 89.15

New Strategy :

Buy at 89.65, Target: 91.30, Stop: 89.00

Despite intra-day rebound to 90.72, as dollar has retreated after faltering below yesterday’s high of 90.83, suggesting further consolidation would take place and below the Kijun-Sen (now at 90.07) would bring retracement towards 89.63-72 (previous support and current level of the Ichimoku cloud top), however, renewed buying interest should emerge there and bring another rise later. Above said resistance would extend upmove from 88.14 to 91.30/40, however, reckon resistance at 92.16 would hold from here.

In view of the above analysis, we are still looking to buy dollar on pullback but at a lower level for such rise. Only below 89.17 (61.8% Fibonacci retracement of 88.14 to 90.83) would dampen this bullish view and risk weakness to the Ichimoku cloud bottom (now at 88.80) and later 88.50.

Based on ActionForex.com Technical Outlook

EUR/USD is still bounded in consolidations and sideway trading from 1.3443 might continue further. Another rise cannot be ruled out but upside is still expected to be limited by 1.3852 resistance to conclude the consolidation and bring fall resumption. Below 1.3530 minor support will flip intraday bias back to the downside first. Further break of of 1.3435 support will confirm fall resumption and should target 161.8% projection of 1.5143 to 1.4217 from 1.4578 at 1.3076 next.

In the bigger picture, outlook remains unchanged. The three wave rise from 1.2329 is treated as consolidation to fall from 1.6039 only and should have completed at 1.5143 already. Fall from 1.5143 is tentatively treated as resumption of the whole down trend form 1.6039 and should target a new low below 1.2329. Break of 1.4217 support turned resistance is needed to invalidate this bearish view. Otherwise, we'd expect fall 1.5143 to continue even in case of strong rebound.

Based on ActionForex.com Technical Outlook

As noted before, GBP/USD's consolidation from 1.4783 is possibly still in progress and another rise could be seen to 1.5194 and above. But still, upside should be limited by 38.2% retracement of 1.6456 to 1.4783 at 1.5422 and bring fall resumption. on the downside, break of 1.4783 will confirm that recent down trend has resumed and should target 200% projection of 1.6875 to 1.5829 from 1.6456 at 1.4364 next.

In the bigger picture, there is no change in our bearish view. That is, medium term rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043 already. Fall from there is tentatively treated as resumption of the down trend from 2.1161 and should target a new low below 1.3503. On the upside, break of 1.5814 resistance is needed to invalidate this view. Otherwise, outlook will remain bearish.

Based on ActionForex.com Technical Outlook

While upside momentum is a bit unconvincing, USD/JPY's rise from 88.13 is still in favor to continue with 89.62 minor support intact, towards near term falling trend line (now at 91.40). On the downside, however, break of 89.62 will argue that rebound from 88.13 is over and will flip intraday bias back to the downside for retesting this support instead.

In the bigger picture, with 87.36 support intact, there is no confirmation that rise from 84.81 is finished. Also, stronger than expected rebound from 88.13 mixed up the outlook in USD/JPY. We'd stay neutral for the moment. On the upside, break of 92.14 resistance will confirm that whole decline from 93.74 has completed with three waves down to 88.13 already. The corrective structure will in turn indicate that rise from 84.81 is still in progress for another high above 93.74. On the downside, break of 88.13 will reaffirm the bearish case that rise from 84.81 is completed at 93.74 already and will turn focus to 87.36 support for confirmation.

Based on ActionForex.com Technical Outlook

USD/CHF dips to 1.0723 today but recovers in early US session. Consolidation from 1.0897 is still in progress and more choppy sideway trading might be seen. Another fall cannot be ruled out with 1.0809 minor resistance intact. But downside is expected to be contained by 1.0608 cluster support (38.2% retracement of 1.0131 to 1.0897 at 1.0604) and bring rally resumption. On the upside, above 1.0809 minor resistance will flip intraday bias back to the upside. Decisive break of 1.0897 will confirm that whole rally from 0.9916 has resumed. Also, sustained trading above medium term trend line resistance (now at 1.0778) will pave the way to 161.8% projection of 0.9916 to 1.0506 from 1.0131 at 1.1086 next.

In the bigger picture, medium term correction from 1.2296 should have completed with three waves down to 0.9916 already. Current rise from 0.9916 is tentatively treated as resumption of the long term up trend from 2008 low of 0.9634. Sustained break of mentioned medium term trend line resistance (now at 1.0778) will further affirm this view. In such case, we'd be looking at stronger rise to 1.1963/2296 resistance zone in medium term. On the downside, sustained break of medium term rising trend line support (now at 1.0415) is needed to invalidate this bullish view. Otherwise, outlook will remain bullish.

Based on ActionForex.com Technical Outlook

Elsewhere, dollar and yen are still soft as market consolidates. US trade deficit came in narrower than expected at -37.3b in January. Exports dropped to $142.7b which imports fell to $180b. Jobless claims remains elevated at 462k. Canada trade surplus came in at CAD 0.8b versus expectation of CAD 0.4b. New Housing price index rose 0.4% mom in January. Aussie continues to consolidate after data showed 0.4k job market expansion in February while unemployment rate rose to 5.3%. Japan Q4 GDP was revised down to 0.9% qoq, 3.8% yoy.

Looking at dollar index, with 80.88 minor resistance intact, consolidations from 81.34 is still in progress and another fall might be seen to 79.82 support and possibly below. However, we're expecting strong support from 79.56 cluster support (38.2% retracement of 76.60 to 81.34 at 79.52) to conclude the consolidation and bring rally resumption. Above 80.88 minor resistance will flip intraday bias back to the upside for retesting 81.34 high first.

Based on ActionForex.com Technical Outlook