Home USD/CHF Outlook May 21-25

USD/CHF  continued to push higher, and  gained almost one cent on the week, closing  at 0.9396. The upcoming week is a quiet one, with only three releases. Here is an outlook for the Swiss events, and an updated technical analysis for USD/CHF.

The Swiss franc lost further ground to the dollar, and the uncertainty in Greece and recession in much of the Euro-zone is weighing on the swissie. As well, Swiss releases have not been impressive,  such as last week’s awful ZEW Economic Expectations.

Updates: Consumer Climate climbed to -8. This was well above the market estimate of -15,  and the best reading since May 2011. The Swiss franc has improved slightly against the surging dollar, as USD/CHF was trading above the 0.94 line, at 0.9406. The pair is unchanged, and was trading at 0.9417. The Employment Level indicator,  which tends to show little movement, will be released late in the week.  The swissie lost some ground, as USD/CHF flirted with the 0.95 level. The pair was  trading at 0.9485. The swissie continues to drop, as USD/CHF  was trading at 0.9545. The  Swiss currency  has  shedded close to 1.5 cents so far this week.

USD/CHF daily graph with support and resistance lines on it. Click to enlarge:  


  1. SECO Consumer Climate: Monday, 5:45. This quarterly composite index has been in deep negative territory since August 2011, indicating deep consumer pessimism about the economy. The previous reading came in at -19, and little change is predicted for the May reading.
  2. Trade Balance: Thursday, 6:00. Trade Balance slumped badly in April, dropping to 1.69B. This was far below  the market forecast of 2.59B. The markets are counting on an improved reading in May, with an estimate of a  trade surplus of 1.95B.
  3. Employment Level: Friday, 7:15. This quarterly indicator  does not tend to show much movement, and the market forecasts are usually very accurate. The  May estimate  stands at 4.05M,  almost unchanged from the April reading of 4.04M.  

*All times are GMT

USD/CHF Technical Analysis

USD/CHF opened the week at 0.9314, and then dropped to a low of 0.9308. The pair then climbed sharply, reaching a high of 0.9500, as the resistance line of 0.9510 (discussed last week) held firm against the surging dollar.  The pair closed the week at 0.9396.

Technical lines from top to bottom:

We start with the resistance line of 0.9915, which has held firm since December 2011. Next, 0.9783 has been a  strong line of resistance since January. This is followed by resistance at  0.9719, which was tested  in February, prior to the steady  slide by USD/CHF.

Below there is resistance at 0.9584. The next resistance is just above the round number of 0.95, at 0.9510.  This line held steady this week, but could be tested if the swissie continues to  weaken.  Below, there is  resistance  at 0.9412, which held firm throughout 2012 until this week.  It is now providing weak resistance to the pair. This is followed by 0.9317, which  was easily breached by  USD/CHF this week, and has now switched to a support line.

Next, there is support at 0.9250. This line has strengthened as the pair  trades at higher levels.  Close by, 0.9204, which was repeatedly tested in April,  continues to provide  support. This is followed by strong support at 0.9156.

Below, is  the round figure of 0.91, a line which the pair repeatedly tested in April. Next, there is strong support at the psychologically significant round number of 0.90. This is followed by the support level of 0.8924, which has not seen any activity since late February. The final line for now is 0.8850, which has acted in a strong support role since last November.

I  remain bullish on USD/CHF.

USD/CHF has been moving steadily upwards in May, and  the pair would have gained closed to two cents this week,  if not for a retraction at the end  of the trading week. US economic releases have been much stronger than those in Switzerland, and with the turmoil engulfing the Euro-zone, the swissie could continue to lose ground, as nervous investors look for safe havens, such as the US dollar.

Further reading:

Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.