At the Forex currency market Swiss Franc rate is traded downward on Friday, continuing to move away from the historical highs, reached earlier this week
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to go down, giving a pair sell signal. Stochastic oscillator continues to give a pair buy signal, being in the neutral zone and approaching overbought area.
Forex recommendations: if current sentiment in the market prevails and in case of breakdown at the level of 0.9330, buyers’ targets will be the levels of 0.9360 and 0.9430. If upward breakdown does not take place, the pair will consolidate near the current levels.
Macro-economic background is quiet for the Franc today
Level of retail sales in Switzerland declined by 2.6% y/y in January against the fall by 0.8% in December; however external background still remains the main driver of the Franc’s movement, as well as possible withdrawal of the players from risks. It is the factor of trade balance (index rose to the level of 1.96 billion euro in January against the growth to 1.26 billion euro earlier) that helps the CHF to be considered a stable currency, since the country does not require external borrowings.
Yesterday’s statistics showed that the level of retail sales in Switzerland declined by 2.6% y/y in January against the fall by 0.8% in December. Probably, cold winter had its impact on the indicator. If the reason for the decline n sales is seasonality, then we will be able to witness recovery in the indicator in spring.
Indicators of last week showed that employment rate in Switzerland declined to the level of 4.085 billion in QIV against expectations of growth to 4.086 billion; however Franc ignored this information. The data released earlier showed that indicator of consumption UBS in Switzerland fell to the level of 1.676 points (-0.15 points) in January amid decreasing sales in retail sector due to the low demand for new cars. However the indicator still remains above the key level of 1.5, which ensures favorable prospects.
The Franc, which had been pushed upward by traders’ fears, just ignored the data of this week: real GDP in QIV: +0.9% q/q (+3.1% y/y) against the forecast of growth by 0.5% q/q (+2.8% y/y); PMI SVME rose to 63.5 points in February against the forecast of 60.5 points. Therefore, Swiss economy is strong and continues to progress along the recovery path.
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