Forex: EUR/USD finds ally on a vertical EUR/CHF (Barcelona) - In the FX landscape, the most notorious mover by far is the Swiss Franc, amid the realization that the Eurozone tail risks are diminishing for the early part of 2013, a fact that seems to be driving a large portion of safe-haven related flows away from the CHF and into riskier assets.

The greatest beneficiary on the ongoing EUR/CHF spikes, currently at 1-year high, is the Euro, having found a positive driver, to help its quest towards the level many traders have in mind at the moment, that is, the USD 1.3485 technical resistance. Besides, cuts in interest rates by the ECB no longer being an option short-term talking, is too underpinning the price.

Commenting on the recent EUR/CHF wild moves, Kit Juckes, Head of Foreign Exchange at Societe Generale, notes: "The market is busy gapping aggressively higher and taking out layer after layer of strikes. It is happening very quickly and market makers are panicking leading EUR/CHF vols to move explosively higher in the front end. The next layer of strikes is reportedly between 1.24 and 1.25, though looking at price action it seems that we hit a layer of strikes every 20 pips or so."

Meanwhile, the US Dollar remains weak across the board, yet the losses vs G10 currencies have been largely contained despite Fed's Bernanke late Monday speech at the University Michigan, in which the chairmanfailed to provide clues over the possible duration of the QE program.

Kathy Lien, co-founder at BKAssetManagement, comments on Bernanke's latest public intervention: "The only clue that the Fed chairman may not be willing to give up monetary easing so easily was when he said the central bank has not run out of ammunition with the main rate at zero. He said securities purchases and communications could still be used to increase transparency and ease monetary policy. Yet along these lines, investors shouldn't make too much of these comments since Bernanke also admitted that the Fed must be vigilant toward asset price bubbles."

Technically speaking, the EUR/USD short term picture looks neutral, says Valeria Bednarik, chief analyst at, while in the 4 hours chart, the bias remains strongly constructive for the bulls, she notes: "RSI reached 70 before bouncing back north, while 20 SMA continues to hold a healthy bullish slope." If the pair can hold above 1.3320/30, "there’s scope for a run towards the 1.3485 price zone" Valeria thinks.

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