Forex Blog
Blog-FX.Com

Swiss Franc rate remains at its local lows at the Forex currency market on Tuesday. The currency has hardly changed its position even considering that investors’ interest to “safe harbor” currencies is very high. Franc was struck from of this list due to the tough stance of SNB.

Forex forecast: MACD indicator for the pair USD/CHF is growing in the positive area and maintains a buy signal. Stochastic Oscillator is in the overbought zone and is giving a similar signal; however it tends to go out of the zone.

Forex recommendations: in case of breakdown at the level of 0.8810, the pair USD/CHF will go to 0.8850 and 0.8880.

If upward breakdown does not take place, the pair will consolidate at the current levels.The data released earlier showed that unemployment rate in Switzerland remained at the level of 3.0% in July. Statistics released earlier showed that the level of retail sales in Switzerland increased by 7.4% in June against the revised level of -3.9% in May. In addition, index of PMI SVME rose to 53.5 points in July against the forecast of 52.5 points.

The data released yesterday showed that unemployment rate in Switzerland remained at the level of 2.8% in August, the same as in July.  It is good that “long arms” of the Franc has not reached this important sector. Statistics which was made public before this decision showed that Switzerland slides down to deflation: CPI in August fell by 0.3% m/m against the forecast of decline by 0.2% m/m.It became known earlier that producer prices and imports prices in Switzerland declined by 0.7% m/m (-0.5% y/y) in July against the fall of 0.6% m/m in June.

In addition, consumer confidence index in Switzerland fell to -17 points in Q3 against the forecast of -5 points. Statistics released earlier showed that indicator of consumption UBS fell to 1.29 points in July against the level of 1.52 points in June. The indicator has been sliding down not for the first month, showing negative tendencies in the economy; therefore, tough position of the SNB will be most welcome.Last week was extremely stressful for Franc and deprived traders of “safe harbor”.

We would remind that Swiss National Bank fixed exchange rate of the Euro in pairing with Franc at the minimum permissible level of 1.20, causing a rally in the market. SNB noted in the comments that it is going to buy foreign currency in unlimited quantities to prevent growth of the Franc, as the CHF adversely affects economy of Switzerland.

Therefore, now the SNB will carefully monitor the situation at the currency market and carry out interventions without warning.At the meeting of Swiss National Bank which will be held this week, a decision on the three-month Libor rate will be made and also comments will be given on the current economic situation.

Tags: