Search ForexCrunch

USD/CHF continued to move upwards this week, gaining about one cent. The pair closed at 0.9657. The upcoming week  has only  three releases, including CPI. Here is an outlook for the Swiss events, and an updated technical analysis for USD/CHF.

The Swiss franc lost further ground to the dollar this week, as  fears of Greece exiting the Euro-zone and the recession in much of the Euro-zone continues to weigh on the currency. The Swiss Economic Barometer and Consumption Indicator were positive, but this was not enough to stop the downward spiral of the swissie.

Updates: All three Swiss indicators will be released  early on  Thursday. USD/CHF is calm, and was trading at 0.9652.   We could see some movement by the pair if the ECB surprises the markets and lowers interest rates on Wednesday. USD/CHF is unchanged, as the pair was trading at 0.9655. The swissie weakened, as the pair was trading just above the 0.96 line, at 0.9608. We can expect some movemment from the pair following the release of three indicators on Thursday, including CPI. As expected. the Unemployment Rate remained the same, at 3.2%. Foreign Currency Reserves were outstanding, jumping to 303.8 billion. CPI posted a flat 0.0% figure, just under the market forecast of 0.1%. The Swiss franc  was down,  as the  USD/CHF was trading at 0.9558.

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

  1. Unemployment Rate: Thursday, 5:45. This  indicator shows very little movement, and has been at 3.1% throughout 2012.  The market forecast calls for a slight increase to 3.2% for the June reading.  
  2. Foreign Currency Reserves: Thursday, 7:00. The indicator provides data on how aggressively the central bank is defending the value of the Swiss franc.   Foreign Currency  Reserves  dropped slightly in May, posting a reading of 235.6 billion.
  3. CPI: Thursday, 7:15. CPI dropped sharply in May, posting a reading of 0.1%. The  markets are expecting no change in the CPI reading.

*All times are GMT

USD/CHF Technical Analysis

USD/CHF opened the week at 0.9563, and then dropped to a low of 0.9529. The pair then climbed  to  a high of 0.9770, close to the resistance line  of 0.9783 (discussed last week). The pair closed the week at 0.9657.

Technical lines from top to bottom:

We  start with  resistance above parity, at 1.0066. This line has not been tested since November 2010. This is followed by parity, which has now become a strong line of resistance. Next, there is resistance at  0.9915, which has  held firm since December 2011. Below, there is resistance at 0.9783. This line held firm this week,  as the pair moved as high as 0.9770 before retracing. This is followed by resistance at 0.9719, which was tested in February, prior to the steady slide by USD/CHF.

There is weak support for the pair at 0.9584. This line  was providing resistance just last week, but was easily breached as the Swiss franc continues to weaken.  This is followed by 0.9510, which has strengthened in support as the pair trades at higher levels. Next, there is support at 0.9412, which had provided resistance throughout 2012, until it was breached in May.

This is followed by support at 0.9317. Below, there is support at 0.9250, which had been a strong resistance line for several months prior to May.  Close by, there  is resistance at 0.9204, protecting the 0.92 line. The final line for now is the round figure of 0.91, a line which the pair repeatedly tested in April.

I remain bullish on USD/CHF.

USD/CHF jumped  approximately six cents in May, and the swissie will likely continue  to have trouble  holding its own against the surging greenback.  With the turmoil engulfing the Euro-zone, and the global slowdown showing no sign of improving anytime soon, nervous investors are likely to  avoid risk and stick  to  safe haven currencies, such as the US dollar.

Further reading: