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The  dollar made some  inroads against the Swiss franc, climbing  close to 0.9550, before giving up most of those gains.   The upcoming week  is very  quiet, with only two  important indicators. Here is an outlook for the Swiss events, and an updated technical analysis for USD/CHF.

Analysts say that Switzerland’s economic activity will be  adversely affected by the strong  franc, and the economy will slip into a  recession in 2012. GDP growth for 2011 is forcast to be 1.8 per cent.  The central bank made no effort to  weaken the Swiss franc, and  left the EUR/CHF peg  of 1.20 unchanged.  As a result ,the pair was down sharply this week.

Updates: After floating above 0.9350, some hope from Europe pushed the dollar down and the Swissie enjoyed this as well. Switzerland’s trade balance surplus rose to 3 billion. The pair found a bottom at 0.9250, before hope faded away from Europe. Dollar/Swiss is stable at around 0.9350, more or less where it started the volatile year. Dollar/Swiss wasn’t excited from the mixed US figures, and remains stable on the reiterated pledge to keep EUR/CHF above 1.20.

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

  1. Trade Balance:  Tuesday, 7:00. The trade balance rose in November,  climbing to  2.15B from 1.85B in October. In addtion to this welcome increase, the indicator  exceeded the market forecast of 2.06B, which is bullish for the franc. The  prediction for December stands at 2.47B. Will the indicator continue to point upwards for the third  consecutive month?
  2. SNB Quarterly Bulletin: Friday, 10:oo. This respected  economic report focuses on the monetary policy of the central bank. If the report is more hawkish than the markets had predicted, this is bullish for the Swiss franc.

*All times are GMT.


USD/CHF Technical Analysis

Dollar/Swiss  opened the week at 0.9255. It  reached as high as 0.9548 before retracting, and closed the week  slightly higher at 0.9340.

Technical lines from top to bottom:

We begin with the major resistance level of 1.0050, followed by the all important parity line. This is followed by 0.9783, which was last tested by the pair back in February.  Below, there  is  resistance at 0.9636. Next, 0.9550 is a strong resistance level, followed by 0.9479.  The next line  is 0.9370, which served as a tough line of resistance back in February and was also approached in April. It is strong resistance.  Below, 0.9340 was breached this week and  is now acting  as a support line.

0.9284  is a minor support line, followed by 0.9210. Below,  0.9080 is  the next  major support line. The round number of 0.90 is  the next  important support level. It capped the pair on a recovery attempt in April and was an important separator in September. It will be tested on any  downwards move.

0.8950  has been a  strong support line, and the next support level is at the  round number of .8900.  The  final support line for now is 0.8781, which served as strong  resistance in early November.

 I am  bullish on USD/CHF.

The Swiss economy is expected to head into a recession sometime next year, and the  debt crisis in the eurozone continues to weigh on the franc. The dollar was up sharply against the Euro this week, and the greenback may rally against the franc as well.

Further reading:


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