The initial shock move lower following the SNB surprise sent EUR/USD to 1.1565. This was a swing low that was followed by a jump back up above 1.17.
However, as markets are digesting the removal of the 1.20 floor under EUR/CHF, the euro begins feeling the gravity. The gradual slide to 1.1615 at the time of writing seems more broad based.
Update: EUR/USD falls to the lowest since November 2003 – guide to the next big levels
The pair falls despite a weak US indicator: the Philly Fed Indicator badly disappointed. And this doesn’t stop the fall of the euro.
The next support line is at 1.15, a very round number.
Here is the chart. Note the 1.1750 line which served as a double bottom. It was breached but the pair continued fighting over it. 1.17 was the launch level of the pair and has a lot of symbolic importance. It was broken with the news from Zurich.
The Swiss National Bank maintained the peg for over three years. The pressure from Russian money moving into Switzerland as well as the upcoming ECB QE, which clearly had an impact on the decisio, made the SNB give up. It mitigated the move with a deeper cut in the already negative deposit rates.
The SNB was alone on the euro bid. Who will support the euro now?
The pair hit a swing low of 1.1565 but immediately returned back up. However, it did not manage to break above 1.1750. From there, a gradual decline began.
1.16 is the level to look at right now.
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