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The Swiss franc  showed little change against the dollar this week, closing just above the 0.90 level, at 0.9008. The upcoming week is fairly quiet, with  four releases this week. Here is an outlook for the Swiss events, and an updated technical analysis for USD/CHF.

Updates: KOF Economic Barometer rose to 0.08, a four-month high. Retail Sales disappointed, rising just 0.8%, as the markets had forecast a strong 3.2% increase. PMI was up slightly, crossing the 50 level, to 51.1. USD/CHF continues to rise, trading at 0.9150. The US dollar has improved  following the release of the March FOMC Meeting Minutes, which indicated that the Fed intends to refrain from further quantitative easing unless the rate of growth falters or inflation drops below the central bank’s 2% targeted rate. Foreign Currency Reserves jumped to 237.5B, up from 224.9B in March. CPI rose 0.6%, the highest increase since April 2011.

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

  1. Retail Sales: Monday, 7:15.  Retail Sales  is perhaps the most important consumer spending indicator, and is often a market-mover.  The indicator jumped 4.4% in March,a  seven-month high. The forecast for  April is for a lower increase, but still solid at 3.2%.
  2. SVME PMI: Monday, 7:30.  This diffusion index is based  on a survey of  purchasing managers.  The  March reading came in at 49, and little change is predicted for this month.
  3. Foreign Currency Reserves: Thursday, 7:00. The indicator has been on a three-month downswing, dropping to 224.9B in March. A reading which is lower than the market forecast is bullish for the Swiss franc.
  4. CPI: Thursday, 7:15. The main inflation index rose 0.3% i n March, a five-month high. The market forecast for  April calls for another increase, up to 0.4%. This higher figure signals increased activity in the Swiss economy.

*All times are GMT

USD/CHF Technical Analysis

USD/CHF opened at 0.9073, reaching a high of 0.9136, as the line of 0.9120 (discussed last week),  which was acting as  weak resistance, was briefly breached by  the pair.  USD/CHF dropped to a low of 0.9008, and closed the week down slightly, at 0.9015.

Technical lines from top to bottom:

We  start with resistance at 0.9510, which was last tested in January. Below, is the line of 0.9412, which acted as support last month, and is now in a resistance role. Next is the resistance line of 0.9306. This is followed by resistance at 0.9250. Below, 0.9204 is providing weak resistance to the pair.

0.9120, which was providing weak resistance to the pair,  was briefly breached this week before the pair retracted.  Below, there is resistance at 0.9033. Next, there is support at 0.9002, a line which  will likely be tested on a further downswing by the pair. This is followed by 0.8924. Below is 0.8850, which has acted in a strong support role since November. Next is the line of 0.8768. This is followed by support at 0.8710. The final support line for now is 0.8637.

I am neutral on USD/CHF.

USD/CHF continues to trade in a narrow range, around the 0.90 level. Traders have been favoring the US dollar and Japanese yen, which are considered safe haven currencies. At the same time, with the improving US economy, traders have started to focus more on fundamentals such as economic growth and short-term interest rates. With slow economic growth and low interest rates, this could take some of the shine off the US dollar.

Further reading: