Swiss Franc Outlook – September 14-19 2009
Posted on September 13, 2009 by Yohay
Filed Under Other Forex Stuff | 10 Comments
The Swiss Franc has been one of the currencies that most enjoyed the dollar’s big fall last week. Together with the very crowded week ahead, the Swissy sure is worth to watch. Here’s an outlook for 5 key events and a technical analysis for USD/CHF.
USD/CHF forex chart with support and resistance lines
Last week’s better-than-expected unemployment rate helped the Swissy with it’s rally. This week features a new Libor Rate and other key indicators. Let’s review them:
- PPI: In the past year, the Producer Price Index always fell below expectations. In the past two months, prices haven’t fallen, and that’s already a positive change. This time, prices are expected to rise by 0.1%. Published early in the week, on Monday at 7:15 GMT.
- Industrial Production: Swiss Industrial Production is quite choppy. This quarterly figure fell by 13.1% last time, and this quarter its expected to leap by 7.6%. The figure includes the manufacturing production component. Published on Tuesday at 7:15 GMT.
- Retail Sales: Swiss Retail Sales have grown last month, after falling the month before. This rather volatile figure has a strong impact on USD/CHF. It’s expected to rise again, this time by 1.1%. Published on Wednesday at 7:15 GMT.
- ZEW Economic Expectations: This German institute surveys the Swiss industrialists as well. After a long period of pessimism (negative score), this indicator has been above the water in the past three months, scoring 18.6 points last time. Will optimism continue? We;ll know on Wednesday at 9:00 GMT.
- Libor Rate: The best is kept for last – Swiss interest is unique – it’s published only once in three months, and is related to the London interest for the Swiss Franc. The target Libor rate has remained at 0.25% time, after declining from higher levels. It’s expected to remain at 0.25% also this time. The more interesting part of this event is the SNB Monetary Policy Assessment. The SNB lays out future plans, and sometimes declares market interventions. They want a weaker exchange rate for their currency, but the recent weakness of the dollar shows us again how central bank intervention is short lived. Published on Thursday at 12:00 GMT.
USD/CHF Technical Analysis
The Swiss Franc had an excellent week. Not only did it break the 1.0530 support line that it was hovering over for many weeks, it fell below 1.0369, which was a swing bottom in the height of the crisis, down o 1.0340. It finally closed slightly higher at 1.0383.
1.0369 serves as an initial support line.. Below that, the magical round number of 1, or parity, is the next support level. USD/CHF was at parity in July 2008.
Looking up, 1.0530 is the first resistance line. Further up, 1.07 and 1.09 served as minor support / resistance lines in the past.
SNB Intervention
The problem with the Swissy is the Swiss National Bank – SNB. They don’t hesitate to intervene in the markets to weaken their local currency. While this move has proven to be short lived, they still do it.
So, beware of such intervention! It will send USD/CHF jumping upwards unexpectedly. Afterwards, the move cannot hold for a long time – making such an intervention an opportunity.
All in all, it looks like the current bearish trend will continue, even if the SNB intervenes.
James Chen also wrote on the breakout of USD/CHF.
Further reading:
- For a broad overview of this week’s events, read the Forex Weekly Outlook.
- For a look on the Euro, read the EUR/USD Outlook.
- For the struggling British Pound, check out the GBP/USD Outlook.
- For the Canadian dollar, read the USD/CAD Outlook.
Tags: central banks,Industrial Production,interest rate,intervention,Libor Rate,PPI,resistance line,Retail Sales,SNB,SNB Monetary Policy Assessment,support line,Swiss Franc,Swissy,Technical Analysis,USD/CHF,ZEW Economic Expectations
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Agree with the SNB, they will try to keep the franc under a certain level for sure. I’m looking forward to a bounce back up.
Charles, in the meantime USD/CHF is going up. It might jump on Thursday when they intervene.
[...] the Swissy? Here’s the USD/CHF Outlook. Enjoyed the post? You may want to subscribe to the RSS feed. Tags: breakout,Core [...]
From my personal analysis GPBUSD, EURUSD, will have a very strong downtrend this week starting from 12GMT Morning .Then USDCAD will as well bullish staring from the same time i strongly advice all traders to watch the trade from this time zone.
obinwelego1@yahoo.com
Ifeanyichukwu , thanks for your comment. 12 GMT is indeed an important hour – the beginning of the New York session. Currently the dollar already began strengthening against other currencies.
[...] For more on the Swiss Franc, read the USD/CHF Outlook. [...]
[...] Swiss Industrial Production is expected to leap by 7.8%, after falling by 13.1% last time. The Swissy is doing quite well. USD/CHF is at new ground. For more on the Swissy, read the USD/CHF Outlook. [...]
[...] Swiss Industrial Production is expected to leap by 7.8%, after falling by 13.1% last time. The Swissy is doing quite well. USD/CHF is at new ground. For more on the Swissy, read theUSD/CHF Outlook. [...]
From my anaylisis GBPUSD,.EURUSD,AUDJPY,AUDUSD, will bearish from 12.00GMT Then USDCAD Will as well bullish at the same time zone here in Nigeria.
Keep watch and see what is going to happen.
I wish all a succefull trading today.
e-mail…obinwelego1@yahoo.com
[...] In Switzerland, it’s time for a new Libor Rate. Many forex traders fear that the SNB will intervene in the markets and send USD/CHF upwards. It’s currently trading at 1.0303, very low. The SNB will state their policy via the SNB Monetary Policy Assessment. For more on the Swissy, read the USD/CHF Outlook. [...]