USD/CHF remained range-bound last week, as the Swiss franc was almost unchanged against the US dollar. The pair closed just below the 0.94 line. The upcoming week has four releases, highlighted by Foreign Currency Reserves. Here is an outlook for the Swiss events, and an updated technical analysis for USD/CHF.
The pair continued to show little movement, as key US releases were mixed. Housing data was weak, but Unemployment Claims was better than the market estimate.
Updates: Retail Sales looked sharp, jumping 5.9%. The estimate stood at 4.1%. SVME PMI came in at 43.6 points, well below the estimate of 47.6. This marked the index’s worst performance in over three years. The Swiss franc has edged higher, as USD/CHF was trading at 0.9363. Foreign Currency Reserves, a key release, will be published on Friday. The indicator has been steadily rising over the past four readings. USD/CHF continues to edge higher, as USD/CHF was trading at 0.9338.
USD/CHF daily graph with support and resistance lines on it. Click to enlarge:
- Retail Sales: Monday, 7:15. Retail Sales climbed 3.2% in the previous reading, which was below the market estimate. The markets are expecting an improvement in the September reading, with a forecast of 4.1%.
- SVME PMI: Monday, 7:30. This important diffusion index dropped to 46.7 points, disappointing the markets. The markets are expecting a similar reading in the October release.
- Industrial Production: Thursday, Tentative. This well-respected index is based on 12 economic indicators. The index hit a 12-month high in August, and the markets are predicting a similar reading this month.
-
Foreign Currency Reserves: Friday, 7:00. Foreign Currency Reserves climbed to 418.4 billion francs in September, as the key indicator climbed for the fourth straight month. Will the upward trend continue in October?
USD/CHF Technical Analysis
USD/CHF opened the week at 0.9331, and touched a low of 0.9329. The pair then pushed up to a high of 0.9417, and closed the week at 0.9391, as the resistance line of 0.9412 (discussed last week) managed to hold firm at the end of the trading week.
Technical lines from top to bottom:
We begin with resistance at 0.9783. This line has held firm since mid-August. This is followed by 0.9719. Next, there is resistance at 0.9584. This level saw a lot of action through most of August and in early September. Below, there is resistance at 0.9510. This line has seen a lot of action recently, and has reverted between support and resistance roles. The next line of resistance is at 0.9412. This line was breached during the week, but managed to stay firm at week’s end as the pair dropped below the 0.94 level.
USD/CHF is receiving support at 0.9317. This line held firm as the pair made a push downwards. Next, there is support at 0.9250. This line has strengthened as the pair has traded at higher levels in the past two weeks. Further support can be found at 0.9182. Next, there is support at 0.9093.
There is further support at 0.9016, just above the crucial 0.90 level. This line has held firm since April. Below, we find support at 0.8918. This is followed by support at 0.8805, which is protecting the 0.88 line. The final support line for now is 0.8683.
I am bullish on USD/CHF.
With QE3 behind us, the dollar has made up much of the ground it lost after the Fed finally pulled the trigger on monetary stimulus. The health of the US economy continues to be a cause for concern, and further weak US data may draw investors to the safe-haven greenback at the expense of the Swiss franc.
Further reading:
- For a broad view of all the week’s major events worldwide, read the USD outlook.
- For the Japanese yen, read the USD/JPY forecast.
- For GBP/USD (cable), look into the British pound forecast.
- For the Australian dollar (Aussie), check out the AUD to USD forecast.
- For the New Zealand dollar (kiwi), read the NZD forecast.
- For the Swiss Franc, see the USD/CHF forecast.
- USD/CAD (loonie), check out the Canadian dollar forecast.
Share
