CHF: Swiss Franc is being corrected after reaching new historic highs

At the Forex currency market Swiss Franc rate is being corrected on Monday: Franc grew significantly last Friday, amid uncertainty at the market, and has reached new historic highs, which is now at the level of 0.7850.

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 is going down in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.7940, the pair USD/CHF will go to 0.7920 and 0.7890.  If downward breakdown does not take place, the pair will consolidate at the current levels.

Swiss data on manufacturing sector in July will be released on Tuesday as well as level of retail sales in June. On Friday, 5 August, investors will focus their attention on CPI for the last month.

Leading indicators index KOF in Switzerland fell to 2.04 in July against the forecast of 2.11. This has become another sign of slowdown in Swiss economy.

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.

Representatives of Swiss government noted 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.

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

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.

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.

 
 

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