- The USD/CHF stabilizes at 0.8810 for the second consecutive day, hugging the 200 -day SMA criticism after bouncing from annual minimums.
- The technical bearish trend persists; Recent maximum and minimum lower suggest that bassists maintain control, but the impulse slows down.
- A break below 0.8800 could trigger deeper falls towards the minimums of the cycle; An upward break opens the door to 0.8850, and then potentially at 0.9000.
The USD/CHF remains firm around the 0.8810 brand for the second consecutive day and clings to the simple mobile average (SMA) of 200 days at 0.8813 after bouncing from annual minimums of 0.8757. At the time of writing, the par is quoted at 0.8814, practically unchanged, at the beginning of the Asian session on Thursday.
Forecast of the USD/CHF price: technical perspective
The USD/CHF is in an ongoing bearish trend after falling below key dynamic support such as 100 and 200 days smokes. In addition, the torque has formed successive series of lower and lowest minimums, indicating that sellers could be in charge. However, the fall stopped without reaching the last minimum of the 0.8726 cycle, the minimum of December 6.
The relative force index (RSI) began to rise on Monday, but remained flat during the session. Therefore, the USD/CHF could remain lateral, waiting for a new catalyst.
If the USD/CHF exceeds the 200 -day SMA, this paves the way to challenge 0.8800, before the last minimum of the cycle. Otherwise, if buyers recover the 200 -day SMA, look for a test of the 0.8850 area before a rebound towards the 0.9000 mark.
USD/CHF price chart – Diario
Franco Swiss faqs
The Swiss Franco (CHF) is the official currency of Switzerland. It is among the ten most negotiated coins worldwide, reaching volumes that far exceed the size of the Swiss economy. Its value is determined by the general feeling of the market, the country’s economic health or the measures taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franco was linked to the euro (EUR). The link was eliminated abruptly, which resulted in an increase of more than 20% in the value of the Franco, which caused a turbulence in the markets. Although the link is no longer in force, the fate of the Swiss Franco tends to be highly correlated with that of the euro due to the high dependence of the Swiss economy of neighboring Eurozone.
The Swiss Franco (CHF) is considered a safe shelter asset, or a currency that investors tend to buy in times in markets. This is due to the perception of Switzerland in the world: a stable economy, a strong export sector, great reserves of the Central Bank or a long -standing political position towards neutrality in global conflicts make the country’s currency a good option for investors fleeing risks. It is likely that turbulent times strengthen the value of the CHF compared to other currencies that are considered more risky to invest.
The Swiss National Bank (BNS) meets four times a year (once each quarter, less than other important central banks) to decide on monetary policy. The bank aspires to an annual inflation rate of less than 2%. When inflation exceeds the objective or it is expected that it will be overcome in the predictable future, the bank will try to control the growth of prices raising its type of reference. The highest interest rates are usually positive for the Swiss Franco (CHF), since they lead to greater returns, which makes the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken the CHF.
Macroeconomic data published in Switzerland are fundamental to evaluate the state of the economy and can affect the assessment of the Swiss Franco (CHF). The Swiss economy is stable in general terms, but any sudden change in economic growth, inflation, current account or foreign exchange reserves have the potential to trigger movements in the CHF. In general, high economic growth, low unemployment and a high level of trust are good for Chf. On the contrary, if the economic data suggests to a weakening of the impulse, the CHF is likely to depreciate.
As a small and open economy, Switzerland depends largely on the health of the neighboring economies of the Eurozone. The European Union as a whole is the main economic partner of Switzerland and a key political ally, so the stability of macroeconomic and monetary policy in the Eurozone is essential for Switzerland and, therefore, for the Swiss Franco (CHF). With such dependence, some models suggest that the correlation between the fate of the euro (EUR) and the Swiss Franco is greater than 90%, or almost perfect.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
