CHF: Swiss Franc is being corrected after reaching highs

At the Forex currency market Swiss Franc is being corrected on Tuesday, after reaching historic highs yesterday, amid the surge of risk aversion, caused by escalation of the conflict in the Middle East.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is going down, maintaining a pair sell signal. Stochastic oscillator is still in the oversold zone today, moving along the signal line and not forming a clear signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8850 the pair will go to 0.8870. If correction is depleted, a maximum level will again become a target for traders.

Today investors will wait for the publication of the trade balance in Switzerland (it is expected that the index will reduce to 2.1 billion francs against the previous level of 2.486 billion francs.

In other respects, the situation in Swiss economy remains unchanged today.
Three- month Libor rate remains unchanged, at the level of 0.25%.
It became known last week that economic sentiment index - ZEW increased to 8.8 points in April against the fall by 13.5 points in February. It was a positive sign for Switzerland which confirmed the continuation of the national economic recovery even regardless of strong Franc. The data of last week demonstrated also that producer price index and prices for import increased by 0.4% y/y in March which agrees with the forecasts.

Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

Representative of Swiss National Bank Mr. Dantin stressed earlier that the Bank is quite capable to ensure price stability even amid excess liquidity. In addition the politician said that the cost of intervention to the currency market will be determined by the informational pressure.
SNB has already highlighted the problems more than once: following the last meeting, the regulator said that strong currency is a burden for the economy and overprice will trigger slowdown in economic growth – largely due to the deceleration in export volumes. 

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