CHF: Swiss Franc stands still in uncertainty

At the Forex currency market Swiss Franc rate stands still on Monday, the direction of its movement will be determined by market sentiment. The external background is still neutral.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is rising, maintaining a former buy signal. However volumes are unremarkable indicating weakness of the signal. Stochastic Oscillator is decreasing in the neutral zone today, giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 0.9230 the pair will go to 0.9210 and 0.9190. If the breakdown doesn’t occur, the pair will continue consolidation near the current levels.

As it became known last Friday, the level of real retail sales in Switzerland increased by 1.5% m/m in February against the decrease by 2.4% m/m in January. At the same time SVME-PMI index decreased to the level of 59.3 points in March against the level of 63.5 points seen previously. Thereby the data was mixed, but CHF didn’t respond to it remarkably, being pressured by USD amid strong U.S. macroeconomic data.

Earlier Swiss National Bank adopted measures of verbal intervention against the Franc last week: representatives of the SNB said following the meeting that strong currency is a hard burden for the economy and its inflated price will trigger a slowdown of  economic growth – largely, due to the decrease of the export volumes.

Note that verbal interventions are ordinary for SNB. Previously Swiss National Bank started to indicate that intervention of possible: representative of the regulator Mr. Dantin said that the Bank is able to ensure price stability even amid excess liquidity. In addition the politician noted that the cost of the intervention at the currency market will be determined by the information pressure.

Level of three-month LIBOR is currently at the level of 0.25%.
Expensive CHF is negative for exporters, prevents rates from stabilization and influences monetary policy tightening. Therefore CHF rollback from historical highs partly eases tension here.

 

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