Over the past few days, we've been seeing a lot of activity in the markets, most especially in EUR/CHF. After over a year of trading below 1.2200, the pair staged three straight days of strong gains, skyrocketing to its highest level in 13 months.

EUR/CHF Daily Chart

What the heck happened? Why has EUR/CHF been gaining so much?

Apparently, it has a lot to do with comments from U.S. central bank officials.

FOMC member Charles Evans, who is perhaps one of the most dovish members in the committee, said in a speech that he does not expect the Fed to tone down its bond buying until 2015. San Francisco Federal Reserve President John Williams was also caught on record saying that he believes the central bank's quantitative easing program will persist "well into the second half of 2013."

And to top it all off, Ben Bernanke, the Federal Reserve's head honcho himself, mentioned that the U.S. economic recovery is still on shaky ground due to threats of a political stalemate over the nation's deficit.

The bottom line is that at the moment, it seems QE4ever will live through 2013 and continue providing the markets with "easy money," contrary to what the most recent FOMC meeting minutes had led us to speculate.

Meanwhile, across the Atlantic, the euro zone has been giving us reasons to buy up the euro and lift EUR/CHF as well. The market's demand for the shared currency seems to have been revived as euro zone fears have died down.

Investors are growing more and more confident in the region's financial situation, and even European policymakers are beginning to share this optimism. To be honest, it's quite easy to see why. The region has been enjoying lower bond yields as of late (they have eased off unsustainable levels), and risks to price stability have leveled off as well.

In fact, just last week, the European Central Bank delivered a surprisingly upbeat rate decision, saying the euro zone has been showing signs of stabilizing and will likely recover in late 2013, which is in stark contrast to the Fed's stance.

It looks as though traders are finally unwinding their doomsday euro-breakup trades, and EUR/CHF has been their key instrument in unloading euro shorts. With the pair hovering well above the SNB's floor of 1.2000, it seems like EUR/CHF is now being propped up by genuine market interest rather than the SNB's defensive efforts, confirming what we had suspected back in September - the euro's strength is legit.

So keep your eyes locked on EUR/CHF, my forex friends. Its next stop could very well be the 1.2400 handle that marked the highs of late 2011!