FxWirePro Call Review: EUR/CHF bull call might sour on dovish ECB

After our June call to buy euro against franc at the then current rate of 1.089 with a target of 1.137 was a success, we initiated another bull call in September after booking profit in the previous one. We suggested buying at the then current rate of 1.155 and at dips with a target around 1.18 area, with the possibility of an extension towards 1.2 area.

While the call is almost at the money as the pair is currently trading at 1.152, in this article we would like to issue a red flag warning. The upcoming monetary policy of the European Central Bank (ECB) poses a major risk to the pair. Despite worse than expected German election outcome, and Catalonia independence referendum, the euro has managed kept its head higher riding on the ECB monetary policy windup speculation. In this scenario, if the ECB turns out to be more dovish than expected on 26th, there is a real risk that the pair might decline sharply and won’t reach the stipulated targets.

In such a case, we expect the euro to decline towards 1.102 area if the pair fails to clear previous high around 1.163.