CHF: Swiss Franc continues to consolidate slowly

Swiss Franc rate continues to grow at the Forex currency market amid positive external background.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, it is going up, giving a pair buy signal. Stochastic oscillator continues to give a pair sell signal, remaining in the oversold zone.

Forex recommendations: considering that bearish sentiment can intensify for the pair USD/CHF in the current conditions traders’ targets will become the levels of 0.9510 and 0.9470 today.

Last week Swiss government announced that the SNB should influence on the rate of the Franc, working with it directly. This increases the possibility of the regulator’s unilateral intervention in the market. Note that Franc has a real detrimental effect on Swiss economy, exerting pressure on the process of its recovery. This has been confirmed by Swiss authorities who reminded that strong Franc complicates correction of the national economy.

However, even a weak Franc will bear risks for Switzerland.

Apparently, Swiss authorities are not ready for the currency intervention, although the market expects unilateral intervention by Swiss National bank. Despite concerns about the rise of CHF and CNB losses (in 2010 the regulator lost 21 billion francs or 4% of GDP due to the currency rise), the probability of intervention is estimated as low so far.

A report of Credit Suisse AG and Osec which was made public this week showed that sentiment of Swiss exporters is improving despite the recent highs of the Franc. Companies are confident that demand for the goods of Swiss production will remain high over the next few months, although the threats posed by the expensive CHF are still present. According to the research, export barometer in QI of this year will amount to 0.6 which is higher than the levels of Q VI 2010. In general the results of the QI of this year are expected to be favourable in the export sector. Companies are taking into account that after the rise of the Franc by 16% last year the demand from the Eurozone will be lower but not critical.
 

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