CHF: Swiss Franc is on the way to consolidation

At the Forex currency market Swiss Franc rate continues to grow on Tuesday, keeping up the trend, which started earlier this week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF; it has come close to the signal line and is ready to cross it upward, confirming a previous buy signal for the pair. Stochastic oscillator has come out of the overbought zone and is giving a pair sell signal.

Forex recommendations: considering external background we can expect that bullish sentiments will intensify and in this case traders’ targets will be the levels of 0.9625 and 0.9580.

In general the situation in Swiss economy remained unchanged.

It became known earlier that CPI increased by 0.4% m/m, +0.3% y/y in January, against the forecast of -0.2% m/m, +0.6% y/y; consumer confidence SECO in January: 10 against preliminary level of 7.  Inflation rate indicates slowdown of the recovery process in Swiss economy and high rate of the Franc is also a party at fault.

We would remind that statistics on Swiss unemployment rate released last week showed that the rate remained at the level of 3.5%. According to the estimates of the State Secretariat of Economic Affairs (SECO), unadjusted unemployment rate amounted to 3.8% last month. Thus, a number of unemployed in Switzerland totaled to 136.542 thousand (earlier: 140.090 thousand).   According to UBS study the level of private consumption increased to the level of 1.7% in January, which above the average annual level.

Economic situation in Switzerland looks ambiguous. On the one hand levels of exports in the country increased by 10.9% y/y in December, the index rose mostly due to the demand for watches (export of watches in December: +25.5%, to 1.53 billion francs). At the same time trade surplus (supported by the data mentioned above) rose to 1.3 billion francs in December and levels of import increased by 10.5% y/y (14.2 billion francs). On the other hand, according to the Research Institute KOF, leading indicator fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05). Retail sales in December declined by0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January was at the level of 60.5 against 61.2 for the previous period.

On Thursday this week, the data on economic expectations index ZEW in February will be released, (forecast -10.0, previous value-18.4).

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