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The  Swiss franc  traded through turbulent waters in the past week. The upcoming week has two important indicators, and naturally more news from Europe. Here is an outlook for the Swiss events, and an updated technical analysis for USD/CHF.

Switzerland, in the heart of Europe, moved together with the euro, and enjoyed the success of the EU Summit. Will it reverse its gains if the doubts return?

USD/CHF daily graph with support and resistance lines on it. Click to enlarge:USD CHF Chart October 31 November 4 2011

  1. Retail Sales: Tuesday, 8:15. Last month saw a big disappointment in this important consumer indicator. Swiss retail sales dropped by 1.9% when a gain was expected. A small rise is likely now.
  2. SVME PMI: Tuesday, 8:30. According the  SVME, the Swiss manufacturing sector fell into contraction last month with the score falling under 50 points to 48.2. This is quite worrying. The score will likely rise, but remain under 50.

* All times are GMT.

USD/CHF Technical Analysis

Dollar/Swiss was struggling around the 0.88 line (discussed last week) before dropping sharply and closing at 0.8630.

Technical lines from top to bottom:

0.9295 capped the pair in March and earlier worked as support. Although it was run through, the pair didn’t manage to conquer it, so it prevails.  The peak of 0.9182 reached in September is the next line. It also worked as support in February and March and is strong.

It is closely followed by 0.9145, which provided support at the beginning of October.  The more recent cap of 0.9085 is another minor line of resistance.  The round number of 0.90 is an important line. It capped the pair on a recovery attempt in April and was an important separator in September. It will be tested on any upwards move.

Below, 0.8930 served as support in April and also worked as resistance in September – more than once. It is strong resistance now.  The round number of 0.88 is of higher importance now after stopping the pair’s drop.

0.8680 is another minor line that provided support for the pair in September. More important downside support is at 0.8550. This was an all time low that served as resistance during the spring of 2011.

0.8460 is a minor line after providing support in May. The final line for now is 0.8330 which was a strong support line.

Below, 0.8240 worked as resistance when the pair was moving higher in September. 0.8080 worked as strong support on the way down.

I am neutral on USD/CHF.

The Swiss franc has shown great dependence on the events in Europe. These might turn to the worse in the upcoming week, but uncertainty is very high. Note the improvement in the US.

Further reading:

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