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USD/CHF dropped sharply last week, as the Swiss franc  gained almost two cents, to close  at 0.9262. The upcoming week has four releases. Here is an outlook for the Swiss events, and an updated technical analysis for USD/CHF.

The swissie  was bolstered  by lackluster employment and industrial production data out the the US. As well as the dramatic QE3 announcement by the Federal Reserve late last week weakened the greenback.

Updates: The franc trades under 0.93. The new worries in Europe  are pushing EUR/CHF closer to the 1.20 floor. So far, USD/CHF still enjoys some independence, but it may not last for too long. ZEW Economic Expectations continues to look very weak. The indicator declined in August, dropping to -34.9 points. The swissie continues to test the 0.93 line. USD/CHF was trading at 0.9295. The Trade Balance surplus hit a four-month low, disappointing the markets. The surplus fell to 1.73 billion francs, well below the estimate of 2.45B. The swissie shrugged off the weak release, as it continues to push higher. USD/CAD was trading at 0.9334.

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

  1. SECO Economic Forecasts: Tuesday, 5:45. This well-respected  economic report is issued quarterly by the federal government. It focuses on the major GDP components as well as  other indicators such as  employment and inflation.
  2. ZEW  Economic Expectations: Wednesday, 9:00. This index is based on a survey of institutional analysts and investors. It has been rising of late, but is still deep in negative territory, with a reading of -33.3 points in August.
  3. Trade Balance: Thursday, 6:00. The monthly Trade Balance surplus has beaten the market forecast for three consecutive readings. The markets are expecting another rise in the surplus in the September release.
  4. SNB Quarterly Bulletin: Friday, 7:30. This SNB report usually has a mild impact on the markets since much of the data has previously been released. However, a report which is more hawkish than forecast is bullish for the swissie.

*All times are GMT


USD/CHF Technical Analysis

USD/CHF opened the week at 0.9454, and touched a high of 0.9483. It was all downhill from there, as the pair plunged to 0.9239. USD/CHF closed the week sharply down, at 0.9262,  slightly above  support at 0.9250 (discussed last week).

Technical lines from top to bottom:

We begin our analysis lower down, following the sharp drop by USD/CHF. There is resistance at 0.9783, which has held firm since mid-August.  This is followed by 0.9719.  Next, there is resistance at 0.9584. This line has strengthened as the  pair trades at lower levels. Below is resistance at 0.9510. This line has seen a lot of action recently, and has reverted between support and resistance roles.

We find further resistance at 0.9412. This line  was providing weak support just last week.  Next, there is resistance at 0.9317. This line had provided  the pair with strong support since  mid-May, until it was breached last week.

The pair is  receiving  support at 0.9250. This is a weak line, and was breached last week before the pair retracted. Further support can be found at 0.9182. Next, there is  support at 0.9093. There is further support  at 0.9016, just above the crucial  0.90 level. This line has held firm since April. Below, we find support at 0.8918. This is followed by support at 0.8805, which is protecting the 0.88 line. The final support line for now is 0.8683.

I am  bearish on USD/CHF.

USD/CHF continues its free-fall, having now lost  over  seven  cents since July. The decline  has continued  despite the ECB bond-buying proposal and QE3,  both of which have  bolstered the euro. Further weak US data or bad news out of Europe could  help the swissie push even higher.

Further reading: