CHF: Franc makes attempt of correction

At the Forex currency market Swiss Franc rate moves down on Monday, making an attempt of correction after the drawdown last week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF however it goes up, confirming a previous buy signal for the pair. Stochastic Oscillator remains in the overbought zone; however it tends to go out of it.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9670 the pair will go to 0.9710 and 0.9730. If the level of 0.9595 is broken down, traders’ targets will become the levels of 0.9580 and 0.9550.

It became known on Friday that Swiss national Bank refused to accept Portuguese state  bonds as collateral for the repo transactions –earlier the same action has been taken for Irish securities. Thus, SNB abandoned unnecessary risks, becoming the first regulator who acknowledged big problems of sovereign debts in the peripheral countries of Eurozone.

Unemployment rate in Switzerland increased to 3.8% in December against the forecast of 3.7% and the previous value of 3.7%. It is a negative indication for the Franc at the moment; however attention of the traders is focused on the Eurozone.

It became known today that consumer price index in Switzerland remained unchanged on monthly basis in December, demonstrating the rise by 0.5% on annual basis; while analytics had expected the growth by 0.2% m/m and +0.3% y/y

According to KOF estimates (Swiss institute of research on economic cycles) Swiss Franc will retain the status of a protective asset and a refuge as long as the period of tension will be maintained in Europe.

KOF has also revised its forecast for GDP growth upward in 2011; is it projected that Swiss economy will increase by 1.9% in 2011 against the previous forecast of 1.8%. In 1012 national economy is expected to rise by 2%.

Interest rate in Switzerland (Libor) is currently in the target level of 0-0.75%; the next meeting of the Swiss National Bank is scheduled for 17 March.  Subsequent meeting of 2011 will be held on 16 June, 15 September, 15 December.

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