Home USD/CHF Outlook – October 24-28
Minors, USD/CHF Forecast

USD/CHF Outlook – October 24-28

The  Swiss franc  was looking for a direction in the past week and eventually strengthened. The upcoming week features two interesting surveys. Here is an outlook for the upcoming events, and an updated technical analysis for USD/CHF.

The talk about a higher floor for EUR/CHF is still around, but there’s no action. Without action, the franc remains strong, especially against the US dollar. Will it change this week?

USD/CHF daily graph with support and resistance lines on it. Click to enlarge:USD CHF Chart October 24 28 2011

  1. UBS Consumption Indicator: Tuesday, 6:00. This large Swiss bank examines 5 leading indicators related to consumption for its index. Last month, the score plunged from 1.28 to 0.79 points, causing a lot of worries. This was the lowest level in 2 years. The score now will likely be similar.
  2. KOF Economic Barometer: Thursday, 10:30. This is an even more important indicator. The KOF institute uses 12 figures about the economy. Also here, the number deteriorated to the lowest level in over 2 years, 1.21, and fell below expectations. Another drop is likely now.

* All times are GMT.

USD/CHF Technical Analysis

Dollar/Swiss began the week with a rise and eventually peaked at the 0.9085 line (mentioned last week). It then turned back and fell all the way to support at 0.88, closing a bit above this line.

Technical lines from top to bottom:

We start at a lower point this week. 0.9505 is minor resistance after serving as such at the beginning of 2011.  0.9370 was a tough line of resistance back in February and was also approached in April. It is strong resistance.

0.9295 capped the pair in March and earlier worked as support. Although it was run through, the pair didn’t manage to conquer it, so it prevails.  The peak of 0.9182 reached in September is the next line. It also worked as support in February and March and is strong.

It is closely followed by 0.9145, which provided support at the beginning of October.  The more recent cap of 0.9085 is another minor line of resistance.  The round number of 0.90 is an important line. It capped the pair on a recovery attempt in April and was an important separator in September. It will be tested on any upwards move.

Below, 0.8930 served as support in April and also worked as resistance in September – more than once. It is strong resistance now.  The round number of 0.88 is of higher importance now after stopping the pair’s drop.

0.8680 is another minor line that provided support for the pair in September. More important downside support is at 0.8550. This was an all time low that served as resistance during the spring of 2011.

0.8460 is a minor line after providing support in May. The final line for now is 0.8330 which was a strong support line.

Uptrend support – broken

Note the clear uptrend support seen on the chart. It began in mid September and was broken now.

I am neutral on USD/CHF.

The Swiss franc enjoyed the dollar’s weakness, but this could reverse this week as the situation in the US continues improving. In any case, its moves became somewhat more limited.

Further reading:

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.