CHF: Swiss Franc has shifted highs and is being corrected

Swiss Franc rate continues to amaze by its persistence: the currency has shifted highs again today, setting it at the level of 0.7608, and is being slightly corrected at the moment.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, giving a sell signal; volumes are increasing. Stochastic Oscillator remains in the oversold zone, and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.7650, the pair USD/CHF will go to 0.7620 and 0.7610. If downward breakdown does not take place, the pair will consolidate at the current levels.

According to statistics released earlier, level of retail sales in Switzerland rose by 7.4% y/y in June against the revised level of -3.9% y/y in May. In addition, index of PMI SVME increased to 53.5 points in July versus the forecast of 52.5 points.

Current data shows that the data released previously was seasonal and does not indicate recession of the economy. Index of leading indicators KOF in Switzerland fell to 2.04 in July, while the forecast had been 2.11.  The data released earlier showed that trade balance in Switzerland totaled +1.74 billion francs in June against preliminary revised level of +3.25 billion francs.

Swiss monetary authorities have mentioned earlier that national economy is still in good shape despite strengthening of the national currency. As the same time, first signs of cooling in the export sector could be observed and if these symptoms continue to develop, it will have a negative impact on the economy as a whole. According to the representative of Swiss National Bank Mr. Jordan, Switzerland went through the crisis easier than other countries largely, due to its monetary policy and if the country will return to deflation, the CNB knows how to fight it off. Jordan is concerned, however about recent dynamics of the EUR/CHF, saying that risks will increase when Italy joins the list of the EU problematic countries.

Earlier, rating agency Fitch has confirmed the ranking of Switzerland at the level of AAA, with a “stable” forecast.            

Authorities believe that Swiss National Bank is solely responsible for the course of monetary policy and in the nearest future it is likely to adopt new, effective measures to achieve price stability.

If CHF continues to rise towards 0.7550, it is possible that CNB can intervene in the course of the currencies trade.

 

 

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