USD/CHF Outlook – July 25-29

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The Swiss franc finally retreated across the board, as the European leaders finally provided some relief for the debt struck continent. The upcoming week consists of two key Swiss surveys. Here is an outlook for the events, and an updated technical analysis for USD/CHF.

The Swiss franc rode on global fear in the past months. The US debt ceiling still needs to be addressed, and the European debt crisis isn’t fully resolved, but the EU summit made positive progress. The overvalued Swiss franc retreated.

USD/CHF daily chart with support and resistance lines on it. Click to enlarge:USD CHF Chart July 25 29 2011

  1. UBS Consumption Indicator: Tuesday, 6:00. This combination of 5 economic indicators was swinging in a limited range for a few months. Last month, it managed to jump higher, reaching 1.91. A similar number is likely now, expressing the strength of the Swiss economy.
  2. KOF Economic Barometer: Wednesday, 9:30. This compound indicator is even more important. It is based on more indicators, 12, and has a stronger market impact. It slid to 2.23 last month, and is now expected to edge up to 2.30 points.

* All times are GMT.

USD/CHF Technical Analysis

Dollar/Swiss began the week with a Sunday gap that sent it to tick even lower than the 0.8080 line (discussed last week), at 0.8075. But from there, it climbed higher, settling in a higher range.

Technical lines, from top to bottom:

A major line on the upside is 0.89, although even after the rises, it is still far in the distance. 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 around one month 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 was more of a pivotal line, where the pair struggled, and is now a serious resistance line if the pair marches higher. Yet another all-time low of around 0.8330 is stronger now, after providing a cushion for yet another week.

The already previous all time low  0.8275 proved to be a strong line of resistance in the past week, after being a record low. It is followed by 0.82, which managed to cap a recovery attempt two weeks ago, and worked as a pivotal line now. This round number is minor now.

0.8130 is a minor line below. We’ve seen it work perfectly well as support, serving as the bottom border of the range. The fresh record low of 0.8075 is the final line in charted territory, before the round number of 0.80.

I am bullish on USD/CHF.

At least for now, the hopes in Europe are enough to push the Swiss franc lower. An announcement of a deal in the US (or a creative solution) will also help the pair. Also at the current levels, the strength of the Swiss franc weighs on the Swiss economy.

Gregor Horvat uses Elliott Wave technical analysis to mark the levels of USD/CHF.

Further reading:

Get the 5 most predictable currency pairs

About Author

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

3 Comments

  1. I think the KOF Institute will come out with a much weaker number than last month. That data will help CHF to move lower.

  2. Bonnie Smith Forex on

    This info on updated technical analysis for USD/CHF is a great read for all forex investors.

  3. Pingback: USD/CHF Outlook – August 1-5 | Forex Crunch