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With the Swiss franc looking as if it was slowly beginning to lose its safe haven status towards the end of last week, the USD/CHF was bearish this week.  

The upcoming week consists of 2 important indicators. Here is an outlook for these indicators, and an updated technical analysis for USD/CHF.

The Swiss franc gained this week on the release of the employment report in the US that showed the economy did not create jobs in August.   The weak employment reports send stocks lower and boosted the demand for the Swiss franc

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

  1. CPI: Tuesday 7:15.  This is the earliest major inflation data released by any country, coming just days after the month ends. The impact tends to be significant but varies from month to month due to volatility in the data set. -0.1% is expected, an increase from last month’s -0.8%.
  2. Unemployment Rate: Thursday 5:45. Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Expectations call for it to remain steady at 3.0%.

* All times are GMT.

USD/CHF Technical Analysis

Having made a break Friday to close at its highest level in a month, 0.8058, (see last week) the Dollar/Swiss began the week strong, continuing to build on that momentum. After peaking at 0.8240, it fell below the round number of 0.80 and even tested ground before closing at 0.7877.

Technical lines from top to bottom:

The 84 line was pivotal during June and July, and is now a high point in the chart.  82.40 was a clear cap just now and also had a similar role beforehand.

Just above the round number of 0.80, 0.8020 held the pair during August and also served as support earlier.The round number of 0.78 was a distinct line separating ranges.

0.7710 was a cap in July and a swing low recently. A lower cap in July was 0.7630 – it separated the strong swing lower.

I am bullish on USD/CHF.

With the safe haven status fading away and moving back to the US dollar, and the weakening Swiss economy, there is room for gains, despite some weakness in the US.

Further reading:

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