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Swiss Franc Little Changed

The Swiss Franc will continue to trade little changed against the US Dollar. In September the pair closed lower by only 128 pips, with a high to low range of only 245 pips. Furthermore notice how on the daily chart below there have been no major price changes since March of this year. We opened April 2016 at 0.9611 and we're currently quoted only 101 pips higher at 0.9712.
But let's zoom out a bit. Look at the monthly chart below. That giant spikey bar in the middle is the SNB peg removal in Jan…
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USD/CHF remains well supported

Monthly chart:
After breaking parity at the start of the year, the SNB shocker on January 15th sent the pair all the way down to 2011 lows. The actual low was 0.7263 or roughly just 70% of its value before the announcement. The turnaround was equally impressive and after barely two months the pair found itself testing middle of the pre-SNB range between parity and 1.03. It declined from there but managed to hold above both 20 and 50 month SMA. The latter is the line in sand: holding above is bul…
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al_dcdemo avatar
al_dcdemo 12 Сент.

UPDATE 6: The long awaited September FOMC meeting will finally happen next week, on Thursday. I think the chances for the Fed to begin tightening are quite good. Despite recent worries regarding global markets, this may be best opportunity for the lift-off this year. If it happens and they remain hawkish, the pair will likely retest at least August high near 0.99 and perhaps parity. If not, 50 DMA is the first line of defense ahead of 200 DMA.

al_dcdemo avatar
al_dcdemo 29 Сент.

UPDATE 7: There are a couple of economic data points coming up from Switzerland later in the week (UBS Consumption Indicator, KOF Economic Barometer, Retail Sales, Manufacturing PMI) but hardly anything market moving. ISM Manufacturing PMI and jobs report from the US are the releases that the pair is waiting for. 50 DMA has been doing its job of supporting the pair ahead of 100 and 200 DMA. Strong resistance zone 0.9850 - 0.9900 remains intact.

al_dcdemo avatar
al_dcdemo 30 Сент.

UPDATE 2: Yesterday's range-bound trading with falling volatility extended into ultra tight consolidation in today's Asian session, which then broke to the upside just before Europe opened for business. The pair climbed some 40 pips from there but is pulling back as I type. 50 DMA is doing its job well and, unless the pair falls below it, near-term technical picture remains bullish.

WallStreet6 avatar
WallStreet6 30 Сент.

Great analysis and good accuracy!

al_dcdemo avatar
al_dcdemo 1 Окт.

Thanks!

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USD/CHF resuming the uptrend

Monthly chart:
After breaking parity at the start of the year, the SNB shocker on January 15th sent the pair all the way down to 2011 lows. The actual low was 0.7263 or roughly just 70% of its value before the announcement. The turnaround was equally impressive and after barely two months the pair found itself testing middle of the pre-SNB range between parity and 1.03. It declined from there but managed to hold above both 20 and 50 month SMA. The latter is the line in sand: holding above is bul…
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al_dcdemo avatar
al_dcdemo 10 Авг.

UPDATE 4: Apart from US retail sales and PPI reports there's nothing particularly market moving on the calendar for the week ahead. That may allow for a nice orderly trend continuation. 0.9875 - 0.9900 is the initial resistance before parity level (1.00), but the offers may be stacked all the way up to the big level. Support is seen in 0.9750 - 0.9800 band and then into 0.97.

al_dcdemo avatar
al_dcdemo 15 Авг.

UPDATE 5: The pair started the week in unconvincing fashion and a glimmer of hope for the bulls showed up on Tuesday afternoon when the pair broke to new highs and kind of held there. After PBOC devalued yuan fix for the second time in a row on Wednesday, the pair sold off in a bout of risk-off weakness, falling more than two cents. It pulled back on Thursday and consolidated for the remained of the week.

al_dcdemo avatar
al_dcdemo 16 Авг.

UPDATE 6: Switzerland will release Retail Sales and Trade Balance but, as is usual for the Swiss macroeconomic indicators, they probably won't move the pair much. Bigger risk comes from the US inflation report and FOMC meeting minutes, which will be released on Wednesday. Initial support shall come in around 0.9725 with more near 0.9675. Resistance is seen in 0.9790 - 0.9820 band and then into 0.99 level.

al_dcdemo avatar
al_dcdemo 28 Авг.

UPDATE 7: As is usual for this pair, price action mirrored EUR/USD in most respects. The pair regained half of the ground that it lost since August 11th, but it would have reclaimed even more if it weren't for a Friday risk-off selling in EUR/CHF. The pair will close the week above 50, 100 and 200 SMA, after trading below them for three days. Weekly candle features a long lower tail and close near the high, but that may not mean a lot in the consolidation.

al_dcdemo avatar
al_dcdemo 29 Авг.

UPDATE 8: There's nothing of note from the Switzerland on the calendar from the week ahead so we will have to turn our attention to the US which will release ISM Manufacturing PMI, ISM Non-Manufacturing PMI and NFP reports. Developments in the global stock markets will also be closely monitored as the pair can be very sensitive to risk-off shocks. Key support is found near 0.95.

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USD/CHF enjoys SNB support

Monthly chart:
After breaking parity at the start of the year, the SNB shocker on January 15th sent the pair all the way down to 2011 lows. The actual low was 0.7263 or roughly just 70% of its value before the announcement. The turnaround was equally impressive and after barely two months the pair found itself testing middle of the pre-SNB range between parity and 1.03. It declined from there but managed to hold above both 20 and 50 month SMA. The latter is the line in sand: holding above is bul…
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al_dcdemo avatar
al_dcdemo 25 Июль

UPDATE 8: Apart from a couple of low tier economic data points (UBS Consumption Indicator, KOF Economic Barometer) there's nothing particularly market moving on the calendar for the week ahead from Switzerland. Main risk events come from across the Atlantic: (Core) Durable Goods Orders, FOMC meeting, Advance GDP. Resistance is seen near 0.9750 (March 31th and April 22th highs) and then 0.9850 (April 13th high). Strong support remains in place at 0.95.

WallStreet6 avatar
WallStreet6 28 Июль

Also about 100 pips away! Great! If the dollar appreciates this week it may be very close!

al_dcdemo avatar
al_dcdemo 31 Июль

We'll see, it has to go down a bit. :)

al_dcdemo avatar
al_dcdemo 31 Июль

UPDATE 9: The pair continued its steady uptrend throughout the week. The most prominent feature of this uptrend are deep pullbacks, but they were all soaked up quickly as evident by the lower tails on recent daily candles. Even strong sell-off on Friday was reversed in just a couple of hours. It was the third week in the row that the pair ended up higher.

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al_dcdemo 1 Авг.

UPDATE 10: As is usual for the first week of the month, we'll get a slew of economic data and it could get quite volatile. NFP report is the most important data point as the Fed may soon be hiking rates based on labour market strength. Demand may start coming in near 0.96 while the strong 0.95 level remains in place if we get any (un)expected sell-offs. Initial resistance is seen near 0.9725.

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USD/CHF will gain in the near-term

Monthly chart:
The pair has broken parity on the first trading day of the year. It was trading around 1.02 when SNB shocker sent it all the way down to 2011 lows. The actual low was 0.7263 or roughly just 70% of its value before the announcement. The turnaround was equally impressive and after barely two months the pair found itself testing middle of the pre-SNB range between parity and 1.03. That was near-term top and it declined from there but it still managed to recoup more than three quarter…
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al_dcdemo avatar
al_dcdemo 7 Июнь

UPDATE 4: The pair ended the week near opening levels what may signal indecision in the market. Initial support is seen around 0.9350 and then between 0.9270 - 0.9300. If that gives way, a retest of May lows below 0.91 may ensue. On the upside, 50 and 100 DMA (currently just above 0.9450) are the first stronger levels of resistance, but the pair will need to convincingly break above 0.95 and 200 DMA to re-establish the bullish bias.

al_dcdemo avatar
al_dcdemo 14 Июнь

UPDATE 5: Even though the pair reversed half of post-NFP losses on Friday and proceeded with a strong decline on Monday, support at 0.9250 held twice before sending the pair back toward 0.94, to just below declining trendline (drawn off March, April and May highs) where it stalled and turned back lower. The pair ended the week slightly behind EUR/USD, but the weekly candle looks more convincing with regard to the trend continuation likehood.

al_dcdemo avatar
al_dcdemo 15 Июнь

UPDATE 6: Besides the Fed, the SNB is another central bank that will hold its meeting in the week ahead. No change from them is the most probable and widely expected outcome. The pair has been trading below 50, 100 and 200 DMA since the beginning of the month and, while it is holding below the averages (especially 200), the sellers appear to be in control. Trendline, drawn off March, April and May highs, will be the first level to watch on the upside.

al_dcdemo avatar
al_dcdemo 26 Июнь

UPDATE 7: In the beginning of the week the pair mostly mirrored its cousin EUR/USD as it hasn't been able to break lower on Monday and then rocketed on Tuesday instead. The remaining three days were range-bound, but the range was wider and swings looked wilder. EUR/CHF flows were likely responsible for the part of this action as the Greek story and uncertainty was weighing on traders' decisions every day.

al_dcdemo avatar
al_dcdemo 27 Июнь

UPDATE 8: There's nothing of note from Switzerland on the calendar for the week ahead. Saturday's Eurogroup Meeting and the rest of the weekend talks appear to be the single most important fundamental factor. Given that the pair usually closely follows the Euro, we may get huge gap open on Monday if we get a deal or if potential for Greek default rises. Especially in the latter case it will be interesting to see the reaction in the pair.

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USD/CHF to stay in range

Monthly chart:
The pair has broken parity on the first trading day of the year. It was trading around 1.02 when SNB shocker sent it all the way to 2011 lows. The actual low was 0.7263 or roughly just 70% of its value before the announcement. The turnaround was equally impressive and after (barely) two months the pair found itself testing middle of pre-SNB range between parity and 1.03. That was near-term top and it declined from there but it still managed to recoup more than three quarters of it…
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WallStreet6 avatar
WallStreet6 1 Июнь

Great job! Congrats! On the bull's eye!

al_dcdemo avatar
al_dcdemo 1 Июнь

Thanks! Yep, it's looking good. :)

al_dcdemo avatar
al_dcdemo 1 Июнь

UPDATE 11: The pair opened the week strongly, adding 30 pips in the Asian session and so far 50 pips in the European session. 0.95 level acts as a decent barrier and the pair will need support from the US data if it wants to trade back above it. It's few minutes till the end of the forecast period and the pair will end up close to the target. I'm very happy with the analysis as the pair nicely conformed to my expectations.

Eberhardt122 avatar
Eberhardt122 4 Июнь

thanks for sharing the advice Al!

al_dcdemo avatar
al_dcdemo 4 Июнь

Thanks! But it really is not meant as an advice, it's just a view of what I perceive as likely to happen. All standard disclaimers apply. :)

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USD/CHF up towards parity

Monthly chart:
The pair has broken parity on the first trading day of the year. It was trading around 1.02 when SNB shocker sent it all the way to 2011 lows. The actual low was 0.7263 or roughly just 70% of its value before the announcement. The turnaround was equally impressive and after (barely) two months the pair found itself testing middle of pre-SNB range between parity and 1.03. That was near-term top and it declined from there but it still managed to recoup more than three quarters of it…
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al_dcdemo avatar
al_dcdemo 6 Апр.

UPDATE 2: Both technicals and shorter-term fundamentals point to further losses in the week ahead, although some sort of pullback and/or re-test of pre-NFP levels is not unlikely in the very short term. First stronger support on the downside comes in at October 15th 2014 low and February 2nd high near 0.9350.

al_dcdemo avatar
al_dcdemo 11 Апр.

UPDATE 3: Even though SNB removed 1.20 cap, USD/CHF returned to the old habit of mirroring EUR/USD movement, while EUR/CHF is trading around 1.05 with declining volatility. The pair opened the week near 0.95 and, after it failed to follow through on post-NFP gains, reversed higher and climbed all the way to (and through) 0.98 level to close the week just below that. Weekly candle looks bullish - long real body with the close above March 31 high and near the high.

al_dcdemo avatar
al_dcdemo 12 Апр.

UPDATE 4: If the pair won't continue to rally on Monday then there will likely be some consolidation, probably at least until US Retail Sales report on Tuesday or perhaps even until ECB meeting on Wednesday. Initial support comes in at March 31 high near 0.9750 and then some more closer to 0.9650. If 0.98 goes, there may not be much resistance before 0.9980 and parity.

al_dcdemo avatar
al_dcdemo 18 Апр.

UPDATE 5: Percentage-wise the pair was the second best performer on the week. Again, price action closely resembled that of EUR/USD, but due to slow slide in EUR/CHF, the downtrend in the pair was more pronounced. Even though it didn't manage to break below April 3 low (0.9480) it closed below 20, 50, 100 and 200 DMA. Long weekly candle that almost engulfs previous week's one and closes near the low also looks bearish.

al_dcdemo avatar
al_dcdemo 19 Апр.

UPDATE 6: There's few CHF related events in the week ahead (Trade Balance, ZEW Economic Expectations) but they are not expected to impact prices much. Given continuing slide in EUR/CHF and imminent break lower in USD/CHF, there's risk that the SNB might start to intervene (verbally or otherwise) in the markets. If the pair convincingly breaks 0.95, stronger demand may come in at weekly support near 0.9360.

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USD/CHF to continue trending up

Monthly chart:
The pair has broken parity on the first trading day of the year. It was trading around 1.02 when SNB shocker sent it all the way to the 2011 lows. The actual low was 0.7263 or roughly just 70% of its value before the announcement. Since then it managed to recoup about three quarters of the losses and regained foothold above both 20 and 50 month SMAs. I'd say 50 month SMA is the line in sand. If it holds above it, that's bullish. Otherwise bearish.
Weekly chart:
The pair continued…
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al_dcdemo avatar
al_dcdemo 21 Март

UPDATE 3: Price action in the pair was similar to that in the Euro. The daily range on the FOMC day was even bigger (percentage-wise) and after retesting parity from below, the pair continued to decline, closing just below weekly support (previous resistance) at 0.9750. If the pair is to decline further, strong support will come in a way of 100 DMA near 0.96 and then 200 DMA and 50 DMA near 0.95 big figure level.

al_dcdemo avatar
al_dcdemo 28 Март

UPDATE 4: Even though EUR/CHF was not standing still, price action in the pair closely mirrored that in EUR/USD, which is not surprising as moves were mostly USD based. Despite temporarily breaking 50, 100 and 200 DMAs, the pair was able to recover and close above all three averages. The pair needs to break and hold below that, if the bears are indeed in control.

foreignexchange avatar

Good Job, do you think it is also possible a trendless area or you think it could have a retracement ?

al_dcdemo avatar
al_dcdemo 1 Апр.

Thanks! I see this pair ranging for a while, before continuing up.

WallStreet6 avatar
WallStreet6 31 Май

Great analysis! and quite close to the target:)

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USD/CHF ascent may become troublesome

Monthly chart:
The pair has broken parity on the first trading day of the year. It was trading around 1.02 when SNB shocker sent it all the way to the 2011 lows. The actual low was 0.7263 or almost 30% of its value before the announcement. Since then it managed to recoup about two thirds of the losses and regained foothold above both 20 and 50 month SMAs. I'd say 50 month SMA is the line in the sand. If it manages to hold above it, that's bullish. Otherwise bearish.
Weekly chart:
After strong r…
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al_dcdemo avatar
al_dcdemo 8 Февр.

As anticipated, the pair stalled ahead of 200 day SMA. Despite various rumours about SNB, including that they are on the bid aiming at 1.05 - 1.10 range in EUR/CHF, the pair slowly drifted lower, but then managed to close the week roughly unchanged. Whether this is just a pause in an uptrend or a near-term top remains to be seen, hopefully next week's price action will give us the answer.

al_dcdemo avatar
al_dcdemo 15 Февр.

Swiss Franc was the weakest among currencies this week as it lost nearly a percent compared to the second weakest currency - the Dollar. After it retested the lows on Monday, it was slowly grinding higher and then closed the week right on 200 DMA. The next strong resistance to overcome is October 15 2014 low (0.9360) and if it goes, then there little to stop the pair until closer to 0.95.

al_dcdemo avatar
al_dcdemo 22 Февр.

After successfully breaking above 200 DMA and 0.9360 resistance, the pair has added additional two cents and traded up to 100 DMA, breaking 50 DMA and 0.95 level in the process. On Friday, however, it reversed strongly, wiping out more than half of its weekly gains, posting outside reversal (aka bearish engulfing) on the daily chart. At this point it appears too strong to be just a normal pullback, but with SNB supposedly on the bid, everything is possible.

al_dcdemo avatar
al_dcdemo 28 Февр.

Last week's outside day reversal proved to be a fake one. The pair erased most of Friday's losses on Monday and then, after some sideways action over the next two days, broke to new marginal highs on Thursday. Currently, 76.4% retracement of the SNB decline at 0.9540 and December 16 low at 0.9550 are capping the pair. If it manages to break higher, then there's little resistance on the chart until closer to 0.9700 - 0.9750.

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