CHF: Swiss Franc remains within trading range

Swiss Franc rate is traded within a narrow range of 0.9419-0.9460 at the Forex currency market on Monday, determining movement direction.

The pair USD/CHF is in the positive area, however it is going down, giving a pair sell signal. Stochastic oscillator has come out of the oversold zone and begun to form a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9400 the pair will go to 0.9350 and 0.9310. If the downward breakdown does not take place, the pair will continue to consolidate within the range.

The data on Swiss economy, released on Friday, in particular leading indicator, according to the Research Institute KOF, turned out negative: the index 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).

Swiss Franc still remains in the focus of regulator’s attention. The head of the Swiss National Bank Mr. Hildebrand noted today that rise of the Franc involves a serious risk for some sectors of economy, however, he emphasized that macro-economic indices demonstrate steady growth of the domestic economy at the moment. The head of Swiss National Bank Mr. Hildebrand said earlier, that in his opinion, stability of Eurozone is the key factor of economic growth in Switzerland. He also expressed confidence that the region will revert   to quiet times. Note that possibility of the regulator’s unilateral intervention in the market can become a reality, although chances of currency intervention are estimated as low so far.

Meanwhile, country’s economy has faced a complicated situation; however it is not a crisis. Expensive Franc became a catalyst for the complications in the economic conditions. At the same time authorities declared that SNB does not influence in any way on the CHF rate, although it bears full responsibility for the monetary policy and its contents. It became known earlier that according to UBS estimates, consumer confidence index in   Switzerland increased to the level of 1.842 in December against 1.624 in November. This is a positive indicator for the local economy. Therefore, the situation in Swiss economy remains ambiguous.

In general, taking into account the latest statistics it can be assumed that the Bank of Switzerland will not raise interest rate, at least until the middle of this year.

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