(MENAFN- Daily Forex)

• The euro briefly plunged against the Swiss franc on Friday before rebounding, with traders eyeing possible SNB defense of 0.92 and relief from a new U.S.–Swiss trade agreement.
• Follow-through could target just under 0.93 as support attempts to stabilize.

The euro plunged against the Swiss franc during the early part of the session on Friday, but we have since seen a turnaround. There are a couple of things that could be going on here. The first one, of course, is that the United States and Switzerland signed a trade agreement. So maybe that is a little bit of a relief valve, if you will, for the pressure building up in the Swiss franc.

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But there's also the possibility that maybe the Swiss National Bank is starting to defend the 0.92 level. After all, they have said that they are watching the FX markets very closely. The question at this point is going to be whether or not we have any follow-through. If we do, I suspect we may aim for just below the 0.93 level.

SNB Watches this Market

Keep in mind, this is the most important chart when trading the Swiss franc because the Swiss National Bank is very concerned about its interest rate course going forward and could even go negative, although they haven't said it yet, just to keep that exchange rate with the euro reasonable. They send 85% of their exports to the European Union, so it does make quite a bit of sense.

EURUSD Chart by TradingView

When I look at the Swiss franc across the board, it does look like support is trying to hold for the other currencies. A perfect example is another video I just wrapped up, the US dollar against the Swiss franc. So, we'll see how this plays out. But this is definitely an area where it's a cheap trade because, quite frankly, if it goes below the bottom of the candlestick for the day, then the bottom falls out. And then at that point in time, you're just waiting for the Swiss National Bank to get involved because they almost certainly will, given enough time.

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