Another week is another record all time low for USD/CHF that just digs lower. Inflation and unemployment are this week’s events. Here’s an outlook for the Swiss events, and an updated technical analysis for USD/CHF, on lower ground.
Bad US figures pushed the Swiss franc lower once again. The currency retains its safe haven status. This was see in the Manufacturing PMI as well as in the very disappointing Non-Farm Payrolls.
USD/CHF daily chart with support and resistance lines marked. Click to enlarge:
- CPI: Tuesday, 7:15. The rise in global commodity prices was only temporarily felt in Switzerland. For two months, prices rises exceeded expectations, but the strong franc helped calm inflation in April, only 0.1%. A drop is likely now.
- Unemployment Rate: Wednesday, 5:45. The country in the Alps has an unemployment rate that is of envy to many countries. After falling unexpectedly to 3.1% last time, a tick up to 3.2% is likely now.
* All times are GMT.
USD/CHF Technical Analysis
The week of Dollar/Swiss is divided into two parts: range trading between 0.8463 and 0.8553 and after breaking lower, the 0.8463 line (discussed last week) served as resistance.
Technical lines, from top to bottom:
We start from 0.92, which was an excellent cushion at the same period of time. 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. This line is further away now. 0.8625 was the previous trough and now works as minor resistance, switching positions from two weeks ago.
The older all-time low of 0.8553 is still of high importance. The next line is last week’s all time low of 0.8463 which was a very distinctive line between ranges in the past week.
The new all time area of 0.8330 will serve as support at the beginning of the week. The round number of 0.80 in uncharted territory is far, but who knows…
I am neutral on USD/CHF.
With falling GDP in Switzerland and a very long winning streak against the dollar, it is important to be cautious on further moves in the Swiss franc, despite the immense US weakness.
More on the Swissie:
- The impregnable Swiss Franc – A very interesting guest post on the franc.
- USDCHF: Threatens Further Weakness – FX Tech Strategy sees more down below.
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 to 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
- For the Swiss Franc, see the USD/CHF forecast.
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