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Forex Analytics of LiteForex of 22.06.10: CHF: Swiss Franc identifies movement direction

At the Forex currency market on Tuesday Swiss Franc identifies movement direction – external background has worsen since yesterday, however investors regained from losses and statistics. 

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF today, however it is growing, which gives grounds for a pair purchase. Stochastic Oscillator has not formed a clear signal on Tuesday.  

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.1130, the pair will go 1.1170 and further to 1.1200. If the pair exceeds 1.1080, traders’ targets will be 1.1030 and 1.0990.

The following Swiss data was released today:

– Trade surplus in May: 0.82 billion francs;

– Export in May: +7.0% y/y to 15.67 billion francs;

– Import in May: +18.2% y/y to 14.85 billion francs.

It became known earlier that CHNB discount rate was left untouched at the previous level of 0.25%, which agrees with the forecasts. According to the released data, industrial production volume reduced by 7.8% in QI, against the forecast of -6.3%.

SHNB stressed on Thursday that global economy recovery is in progress and Swiss domestic economic indicators are still favourable. Deflationary risks, according to the bank’s representatives have come to naught. Inflation forecast this year amounted to +0.9% (preliminary value: +0.7%), in 2011: +1.0% (preliminary value +0.9%), in 2012 – about +2.2%. SECO, the Swiss State Secretariat for economic affairs has raised its forecast of the country’s economy growth to 1.8% this year against the previous level of 1.4%. “The growth has been quite stable due to sustained exports recovery and high consumer demand in private sector. Even the latest economic indicators have not shown any signs of slackening“- comments to the document said.

According to international economists, Swiss economy shall continue to recover; however government forecast can be delayed because of the situation in the Eurozone. Note, that earlier SHNB maintained low interest rate, relying on the insignificant inflation rate and players’ concern about the state of affairs in the Eurozone.

Swiss Minister of Economy Doris Leuthard stated at the end of last week that the growing debt crisis in the EU countries makes economic recovery process more complicated in the country. “We cannot have illusions that the economy will maintain its positive momentum, as the situation with the Euro creates problems in Switzerland.” – She stressed.

Investors buy Swiss Franc against the global economy recession and stock market sales – at this, according to monetary politicians, CHF growth can prevent recovery of such important sector as Swiss export. The Bank of Switzerland has spent a lot of money to curb the Franc rise, however Leuthard believes now that there is a limit to everything.  

 

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