The USD/CHF moved in a similar way to the way other major currencies behaved last week. The currency pair traded in a tight range in the first couple of trading days for the week, spiking twice on the monetary policy statements of the Federal Reserve and the ECB on Wednesday and Thursday respectively. The franc even depreciated to 0.99 against its U.S. counterpart, but after the sentiment among investors improved in the afternoon part of the Thursday session and especially on Friday the Swiss franc regained its strength, finishing the week close to the highs of 0.9691. The sell-off in the USD/CHF was so strong that in less than 8 hours the currency pair pushed below its 25-period, its 50-period and its 200-period moving averages. This week the Swiss franc is much less volatile, which is still trading below its 200-period moving average. Despite that, yesterday the Swiss currency managed to post a fresh new high against the greenback for the period after July 5th. Other than that not much is happening with the USD/CHF, which is struggling to find a direction after declining to 0.9661 on several occasions and advancing as high as 0.9744, where resistance seems to be forming. Even the important economic news that were released yesterday for the Swiss economy were not able to stir the market and push the franc decisively in either direction. On Tuesday we saw the foreign currency reserves of the Swiss National Bank rising to 406.5B from 365.1B for the month of June. The figures indicated that the central bank’s open market operations have resulted in more francs being pumped in the economy, which should have resulted in the Swiss franc declining against the greenback. The news, however, had only a modest effect on the USD/CHF, which moved slightly higher. At the same time the CPI numbers landed on analysts’ projections, posting their worst reading since August 2011. Inflation, as measured by the change in prices of goods and services purchased by customers, declined by 0.5%, indicating that Switzerland is also experiencing the same slowdown we are seeing in all major economies in the world. Today more bad economic data is pouring for the Swiss economy. The consumer climate indicator, published by the State Secretariat of Economic Affairs, suddenly dropped to -17, which is its lowest reading since February. The USDCHF moved higher after the news hit the wires, but, again, its gains remained rather limited as the resistance at the 200-period moving average proved to be quite strong. The currency pair, however, managed to push above its 25-period moving average and it is currently standing at 0.9710.
Technically speaking, support in the USD/CHF is provided by the lows we touched earlier in the week around 0.9668. Resistance, as we already mentioned, stands at the 200-period moving average around 0.9744. Oscillators are mixed with the relative strength index at 48 and the stochastic approaching overbought territory, currently standing at 71. The MACD is well below the key 0 level and it is issuing buy signal, which are yet to be confirmed by other technical indicators.
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.