- USD/CHF collection to around 0.8220 in Tuesday’s early European session.
- The couple retains a negative perspective below 100-day EMA from the RSI Bear.
- Initial support appears at 0.8150; The first additional barrier is located in the zone 0.8300-0.8305.
The USD/CHF pair regains the lost base to almost 0.8220 during the early European session on Tuesday. However, a potential advantage for a couple may be narrow in connection with the fears of the growing US national deficit. Traders are waiting for a consumer trust report by an American conference, which is expected to seem later on Tuesday. In addition, orders for fixed goods and the Dallas Fed production indicator will be published.
According to the Daily Chart of Bears, the USD/CHF perspective remains in the game, because the pair remains narrow below the key 100-day interpretation medium-medium (EMA). The path of the slightest resistance is a disadvantage, and the 14-day relative strength indicator stood below the central line near 41.55.
The first minus purpose for the cross appears at 0.8150, the lower border of the Bollinger band. Extended losses could observe a decrease to 0.8067, the lowest of April 22. The next level of competition for USD/CHF is noticeable at the psychological level of 0.8000.
On the other hand, the level of direct resistance is located in the zone 0.8300-0.8305, representing the round figure and the highest level of May 22. Half -trade above this level can attract some buyers to 0.8445, the upper border of the Bollinger band. Further north, another obstacle to watch is 0.8575, 100-day EMA.
FAQ of the Swiss franc
Frank Swiss (CHF) is the official currency of Switzerland. This is one of the ten most rotating currencies around the world, reaching volumes that significantly exceed the size of the Swiss economy. Its value depends on the broad market mood, the economic health of the country or the actions taken by the Swiss National Bank (SNB). In the years 2011–2015 the Swiss Frank was set at EURO (EUR). PEG was suddenly removed, which caused an enhance in the franc value by over 20%, causing confusion in the markets. Although PEG does not apply, CHF fortunes are usually strongly correlated from the euro due to the high dependence of the Swiss economy from the neighboring euro area.
FRANC (CHF) Swiss is considered to be protected or currency, which investors buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a sturdy export sector, gigantic central bank reserves or a long -term political position towards the neutrality of global conflicts make the country’s currency a good choice for investors escaping at risk. Turbulent times will probably strengthen CHF in relation to other currencies that are seen as more risky to invest.
The Swiss National Bank (SNB) meets four times a year – once a quarter, less than other gigantic central banks – decide about monetary policy. The bank is aimed at an annual inflation rate less than 2%. When the inflation is above the target or it is expected that it will be above the target in the foreseeable future, the bank will try to tame the enhance in prices, raising the policy rate. Higher interest rates are generally positive for the Swiss franc (CHF) because they lead to higher crops, which makes the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
The release of macroeconomic data in Switzerland is the key to assessing the state of the economy and can affect the valuation of the Swiss Francang (CHF). The Swiss economy is essentially stable, but any sudden change in economic growth, inflation, current account or central bank foreign reserves can potentially cause CHF movements. Basically high economic growth, low unemployment and high trust are good for CHF. And vice versa, if economic data indicate a weakening rush, CHF probably absorbs.
As a petite and open economy, Switzerland is strongly dependent on the health of neighboring euro -zone economies. The wider European Union is the main economic partner of Switzerland and a key political ally, so the stability of macroeconomic and monetary policy in the euro area is necessary for Switzerland, and therefore for Swiss franc (CHF). With such a relationship, some models suggest that the correlation between the fate of the euro (EUR) and CHF is over 90%or is close to the ideal.
Daily USD/CHF chart
