At the Forex currency market Swiss Franc rate continues to retreat on Wednesday. The reason for protection currency sales is simple: investors at the global capital markets believe that the process of the global economic recovery will be continued at a steady pace, which reduce the interest in the protective currencies.
Forex forecast: MACD indicator is in the positive area for the pair USD/CHF and is going upward, giving a pair buy signal. Stochastic oscillator remains in the overbought zone, confirming this signal and creating conditions for trend reversal.
Forex recommendations: if current sentiment will maintain in the market and in case of breakdown at the level of 0.9650 the pair will go to 0.9675 and 0.9720. If a breakdown will not take place the pair can start consolidation close to the current levels.
Internal situation in Swiss economy has not changed much today.
We would remind that statistics on Swiss unemployment rate released yesterday showed that the rate remained at the level of 3.5%. According to the estimates of the State Secretariat of Economic Affairs (SECO), unadjusted unemployment rate amounted to 3.8% last month. Thus, a number of unemployed in Switzerland totaled to 136.542 thousand (earlier: 140.090 thousand). According to UBS study the level of private consumption increased to the level of 1.7% in January, which above the average annual level.
The previous macro-economic statistics was mixed. On the one hand levels of exports in the country increased by 10.9% y/y in December, the index rose mostly due to the demand for watches (export of watches in December: +25.5%, to 1.53 billion francs). At the same time trade surplus (supported by the data mentioned above) rose to 1.3 billion francs in December and levels of import increased by 10.5% y/y (14.2 billion francs).
On the other hand, according to the Research Institute KOF, leading indicator fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05). Retail sales in December declined by0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January was at the level of 60.5 against 61.2 for the previous period.
In the meantime, the rollback of the CHF gives time for a breather for Swiss economy, as high levels of national currency seriously complicate the process of economic growth.