Forex Analytics from LiteForex of 04.11.10: CHF: Swiss Franc continues to consolidate at Forex, however purchase volume can be reduced

At the Forex currency market Swiss Franc rate is going up on Thursday as well as two last days, however the descend can be slowed down in advance of the statistics release from large countries.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and it goes down, giving a pair sell signal. Stochastic Oscillator is giving an antipodal signal today, being in the oversold zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9740 the pair will go to 0.9775 and .9820. If the level of 0.9700 is exceeded, traders’ targets will be the levels of 0.9650 and 0.9600.
As it became known today CPI index in Switzerland increased by 0.5% m/m (+0.2% y/y) in October against expected growth by 0.6% m/m (+0.3% y/y).
It also became known yesterday that retail sales index in Switzerland increased by 3.8% on annual basis in September against the previous growth by 0.1% .

Swiss National Bank representative Mr. Jordan noted on Wednesday that prolonged retention of the interest rates at the low level can cause additional risks for the economy. SNB intends to monitor carefully the dynamics of the real estate sector.  We would remind that interest rate in Switzerland has remained unchanged for 19 months already at the level of 0.25% per annum. According to the head of the Swiss National Bank, Mr. Hildebrand it is evident now that low levels of the interest rate can become a catalyst for the emergence of new bubbles in the real estate sector. “The longer the monetary policy remains of expansionary nature, the higher the risks of unwanted effects. Some signs of which have already been noticeable. It is especially evident in the real estate market where there is a great imbalances risk in case the rates are maintained at the current low level for a quite a long time”- he stressed last week. Hildebrand also noted that current level of the interest rate in Switzerland is still acceptable; he pointed however that current situation is ideal for the emergence of risks.

In accordance to the average forecast GDP in Switzerland will increase by 3% in 2010 which is much higher than the average forecast in comparison with other European countries. At the same time inflationary levels will remain close to the lows. According to the official statistics GDP in Switzerland will increase by 0.9% on quarterly basis (+3.4% y/y) against the forecast of +0.8% (+2.6% y/y) Private consumption index in Switzerland increased to 1.86 in July against the previous level of 1.81 (revised data:  1.80).
 

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