By Sean Hyman On Tuesday, I told you that I believed the Swiss would soon intervene in their currency once again.

Well, lo and behold, it happened the very next day. And the EUR/CHF (euro/Swiss franc) soared just as I said it would.

As a Forex trader, I had my entry order in for the EUR/CHF already on Tuesday. (For those of you who are new to Forex, an entry order is a special type of trade that instructs your FX dealer to only buy or sell a currency pair if it reaches a specific level. It ONLY lets you “enter” a trade at the price level you want, hence the name “entry order.” If the currency pair never reaches that level, then you don’t get filled on that trade.)

In short, I was ready to go whenever the Swiss National Bank decided to intervene. I woke up the next morning and I was filled on the order and was up over 260 pips! That’s huge for a pair that typically moves about 80 pips in any given 24-hour period!

Check out what the intervention looks like on the 5-minute chart below.

The Swiss Completely Obliterate the Short-Sellers!

You can see why it’s important even for technical traders to pay attention to the central bank comments. When central bankers speak, they’re usually not bluffing – especially central bankers outside the U.S.

Central bankers around the world will usually send out some warning signals to the markets before they act. For instance, they can express their disgust for where the currency is, like the Swiss did. And if Forex traders don’t pay attention, Central Bankers will soon put them in the “House of Pain.”

In this case, anyone short-selling the EUR/CHF got killed this week! They lost 260 pips overnight. That’s huge!

Of course, I was long the EUR/CHF because I anticipated the intervention. So I’m loving the Swiss National Bank this week!

Okay, let’s talk about what’s coming next. It appears that the Swiss have successfully reversed the downtrend in the EUR/CHF pair. This will cause them to gain support from the big hedge funds and their “trend following systems.” That’s one reason why the Swiss sold francs furiously yesterday, to ensure they got above the downtrend line on the daily, 1-year chart.

This is a monumental moment for the Swiss! Now, if this trend reversal sticks…it will bode much better for their economy going forward.

Until next time….

Have a great weekend!
Sean Hyman, aka Professor FX

P.S. One of your fellow FX University readers wrote me today to say she made a 300-pip profit on my EUR/CHF recommendation. That’s great! Congrats! If anyone else has comments or questions for me, you can email me at info@worldcurencywatch.com.

Related articles:

Swiss Cry “Uncle!”

An Act of Desperation for the Swiss

How to Choose a Profit Target for Your Next Forex Trade