Tax evasion is not a crime in Switzerland (although it is punished by hefty levies on her citizens if discovered), but tax fraud is considered to be a crime. UBS, the largest bank in the country, now sometimes called the nation’s chief troublemaker, was forced by the United States to admit that the company’s employees helped U.S. citizens commit outright tax fraud and must reveal those clients’ details. That is the essence and there is nothing wrong with that (besides the fact that the U.S. has been circumventing the normal international judicial assistance procedure already underway in Switzerland). The resulting media outcry in the country about the "endangered bank secrecy act" was loud, but with some irrational exuberance. Swiss banking secrecy is still the law of the country and the reputation of Switzerland’s high political stability and security of law is still intact. The Swiss franc, a small market, continued its business as usual with its major trading partners, the euro, pound, USD and yen, trading right now with even more stability. The CHF is currently overbought, especially against its major partner, the euro. Noticing that, and the fact that the Swiss National Bank is taking considerable care not to allow the CHF to gain too much strength vs. the euro, we expect upward corrections in the EUR / CHF equation over the next days.

In the major pairs, and for today’s trading hours, we see some more bid tone emerging in the USD, and another test of its longer-term resistance lines, as described in detail below. Note the release of the U.S. Treasury Budget at 19:00 CET, with an expected ballooning deficit for February 2009.

Intraday Market Outlook for Day Traders

EUR / USD
Having reached a high of 1.2820 yesterday, the pair came under pressure in Asian and early European trading, currently priced at 1.2710 in a slight recovery move. We see that recovery limited to 1.2720 in today’s trading, and another downmove to support at 1.2580.

GBP / USD
Cable is currently trading at 1.3745, hovering above its support zone between 1.3680 and 1.3700. We expect that support to be broken today on the downside in an attempt to move towards the major support at 1.3650.

USD / CHF
The dollar continued its upmove against the Swiss franc in European morning hours and is currently priced around 1.1630. More of that bid tone is to come today, first breaking the 1.1670 resistance level and then testing the 1.1730 resistance zone.

USD / JPY
Against the yen, the dollar remained in a neutral stance during most of Asian and early European trading, ranging between 98.80 and 98.30. Currently priced at 98.50, we expect it to develop a bid mood, leading to resistance towards 99.00, but not breaking that level.