CHF: Swiss Franc started to consolidate after sharp rise

At the Forex currency market Swiss Franc rate started to consolidate on Wednesday after the sharp rise yesterday, awaiting new signals to determine movement direction.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to go down, which confirms a previous sell signal for the pair. Stochastic Oscillator has come into oversold zone today and is giving a similar signal, at the same time, indicating the completion of the rising trend for the Franc soon.

Forex recommendations: to make sure that descending trend will be continued for the pair USD/CHF today, we shall see a breakdown at the level of 0.9320, after which the levels of 0.9260 and 0.9200 will become targets of traders.

Swiss economy continues to demonstrate slowdown in the recovery pace. Swiss data released yesterday was negative: (Retail sales in December: -0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January: 60.5 against 61.2 for the previous period).

In addition, indicators of last week showed ongoing pressure on Swiss economy: leading indicator according to the Research Institute KOF 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).

Therefore, pace of economic recovery in the country has obviously slowed down and the guilt for it is laid on Swiss Franc too.

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.

Note that state of affairs in Swiss economy is quite grave, despite optimistic forecasts of the authorities.

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