USD/CHF Outlook – April 25-29

The Swiss franc has reached fresh highs against the falling greenback. The upcoming week consists of important surveys that will rock the franc. Here’s an outlook for the Swiss events and an updated technical analysis for USD/CHF.

The dollar’s weakness, especially after the warning from S&P, has been the main driver of the pair in the past week – the Swiss franc continues to enjoy the safe haven status.

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

1. Trade Balance: Tuesday, 6:00. Switzerland, that has an export oriented economy, enjoys a significant surplus in its trade balance. Last month saw a wide surplus of around 2.4 billion francs. This is likely to squeeze this time.
2. UBS Consumption Indicator: Tuesday, 6:00. This major Swiss bank combines 5 economic figures for its highly regarded indicator.  After staying at high levels, even close to 2 points, a significant fall has been recorded last month – 1.46 points. An upwards correction is likely now.
3. KOF Economic Barometer: Friday, 9:30. This indicator is even more important, and will set the tone for the end of the week. After falling from highs, this compound index made a comeback,rising to 2.24 points and exceeding expectations. Another small rise is due now.

* All times are GMT

USD/CHF Technical Analysis

After a failed attempt to rise above 0.90 (discussed last week), Dollar/Swiss made a huge fall, breaking to fresh all-time lows and setting the record at 0.8780 before rising back some of the way.

Looking up, initial resistance is found at the previous all-time low of 0.89. This is likely to be a tough barrier on any recovery attempt. IT’s followed by 0.90, which is not only a round number but also worked in both directions.

Moving higher, the pair will encounter resistance at 0.9125.  It provided support twice in the past month, but was broken just now. Rather close above,  0.92 is the next barrier – it that held the pair at the beginning of March and at the end of February.

Higher above, 0.93 was a trough early in the year and is another round number. It works as  minor resistance. More significant resistance appears at 0.9370, which capped recovery attempts for quite a few days at the beginning of March.

Even higher we find 0.95 – it worked twice –  in October and December and now works as minor resistance. It’s followed by 0.96, which provided support at the beginning of the year. There are more lines on the upside, but they’re far out in the distance.

Looking down, the fresh trough of 0.8780 provides the initial line of support. Further support lines are in the wild. Perhaps another 120 pips lower, at 0.8680, the pair will find further support.

I am neutral on USD/CHF

While the Swiss franc is definitely overblown, the risk coming from the US rate decision can help the pair dig even lower. This also depends on oil prices, which returned to the recent peaks and aim to push higher. Higher oil means a stronger Swiss franc.

Further reading:

• For a broad view of all the week’s major events worldwide, read the  USD outlook.
• For EUR/USD, check out  the  Euro/Dollar forecast.
• 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 USD/CAD (loonie), check out the  Canadian dollar