USD/CHF Outlook – July 11-15

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This week, there is no new historic bottom for USD/CHF, which seems to have stabilized. The upcoming week is light in events, so the technical lines and the debt crisis news will continue rocking the currency. Here’s an outlook and an updated technical analysis for USD/CHF.

The aid presented by Trichet to Portugal certainly eased tensions after the big downgrade from Moody’s. With less fear in the markets, the Swiss franc weakened. Will this continue?

USD/CHF chart with support and resistance lines on it. Click to enlarge:USD CHF Chart July 11 15 2011

  1. PPI: Wednesday, 7:15. Prices in Switzerland are slowing down. This is a result of the strong franc and the falling commodity prices. After a few months of steady rises in producer prices, a drop of 0.2% was reported last month. A similar drop is likely now.

* All times are GMT.

USD/CHF Technical Analysis

Dollar/Swiss fell at the beginning of the week, but didn’t challenge the 0.8330 line (discussed last week). It then recovered and also broke above the 0.8563 line.

Technical lines, from top to bottom:

While still far away, 0.9370 is of importance, This was a stubborn peak at the beginning of March. Below, 0.92, an excellent cushion at the same period of time is resistance.

Minor resistance is found at 0.9125 after working as minor support earlier this year. The round number of 0.90 worked well in both directions, especially as resistance, capping recovery attempts by the pair.

Another major line is 0.89. This was a double bottom, and was an all time low for around one month, until lower levels were reached. 0.8780 was a swing low and capped the pair. It is minor resistance at the moment.

0.8625 was the previous trough and now works as minor resistance, switching positions from a few weeks ago. The older all-time low of 0.8553 remains very important and can be challenged quite soon.

The next line is previous all time low of 0.8463 which is now more of a pivotal line, where the pair struggled. The previous all-time lows of around 0.8330 is stronger now, after providing a cushion now.

The new all-time low of 0.8275 is the final frontier in charted territory. It was set two weeks ago. In uncharted territory down below, we have 0.8250, followed by the very round number of 0.80.

I am neutral on USD/CHF.

On one hand  end of QE2 in the US and the excessive strength of the franc point to a strong dollar/Swiss. On the other hand, the weak Non-Farm Payrolls in the US and the debt crisis in Europe fuel global fears, and this weighs heavily on the pair.

Further reading:

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

2 Comments

  1. The USD is f–ked! Obama will destroy it unless he is either impeached or is only a one termer.. The USD and the US will become weaker and weaker as he spends more and more.. The only salvation is austerity to the max, reducing benefits to his minions/supporters (who adore him for redistributing the wealth and reinforcing their sloth). Beware the exit taxes and house sale taxes scheduled for 2013 that are hidden in Obanacare– buy the swiss franc and intetrnational; equities that pay in harder currencies- that will protect you as the4 dollar weakens, and be sure to stock up on canned goods and water (along with ammunition) Expect not-so-civil riots as the economy weakens and for the ‘anointed one” to use the military (or try to) when insurrection against his reign of terror finally breaks out.

    Good luck to all. May god help us.