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At the Forex currency market Swiss Franc rate remains in the six-day range on Tuesday morning, expecting developments in the financial area at the end of the week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going up, shaping a buy signal. Stochastic Oscillator goes down in the neutral zone and is giving a sell signal.

Forex recommendations: off the market.Feasible event scenario at Forex: in case of breakdown at the level of 0.7890, the pair USD/CHF will go to 0.7920 and 0.7950.

If upward breakdown does not take place, the pair will go to 0.7820 and 0.7780.It is worth keeping an eye on the trade balance in Switzerland in July today: the fall in the indicator can affect the exchange rate of the Franc. Main Swiss statistics will be released at the end of the week; on Thursday, investors will await information about the index of investor economic expectation ZEW in August, index the leading indicator KOF will be made public on Friday. It became known this week 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. The data released earlier showed that unemployment rate in Switzerland remained at the level of 3.0% in July. According to statistics released earlier, level of retail sales in Switzerland rose by 7.4% y/y in June against the revised level of -3.9% y/y in May. In addition, index of PMI SVME increased to 53.5 points in July versus the forecast of 52.5 points. Last week, Swiss National Bank held a round of talks with Ministry of Finance, which resulted in the declaration of complete mutual understanding in economic issues.

Thus, Ministry of Finance intends to spend 2 billion francs to support economy, since exchange rate of the national currency is too overvalued which is detrimental to economic system.  

In addition, authorities of the country stated that decision on the target level of Franc will be made by the CNB. We would recall situation of last week: Swiss National Bank intervened into the trades at the currency market; judging by the forwarding sector, SNB continued to pour liquidity at the trading floors to curb the growth of the Franc. Swiss National Bank had also restricted three- month Libor rate to 0-0.25% (it had amounted to 0-0.75% previously).

They also stated that increasing rate of the Franc is a negative factor for the national economy; therefore Libor rate will tend to zero and the SNB is going to infuse liquidity into the market in the nearest future to “chill out” the Franc. Weighty argument of the SNB was that there is a threat to economic development and stability.

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