- USD/CHF trapped between 0.8180–0.8300 while buyers fail to keep the breakout above resistance.
- The RSI is still bassist; A break below 0.8200 could expose the minimum of May 7 and the minimum of the year at 0.8034.
- Alcistas must recover 0.8250 to test 0.8300 again and challenge the 50 -day SMA at 0.8376.
USD/CHF It operates with weakness on Friday after an US report showed that inflation is approaching the 2% target of the Federal Reserve (Fed). Meanwhile, the US president, Trump, complained about the slow negotiations between Beijing and Washington, who have stirred the markets. However, he said he would talk to the president of China, Xi Jinping, to help solve the problem. The pair remains flat at 0.8227.
Forecast of the USD/CHF price: technical perspective
USD/CHF still has a bearish trend, but the trend stagnated, consolidating within the range of 0.8180-0.8300 during the last eight days. On Thursday, the PAR reached a maximum of seven days of 0.8347, but the buyers failed to maintain the level of 0.8300, which aggravated the fall of the torque towards the level of 0.8200.
The momentum, measured by the relative force index (RSI), is bassist, but buyers who maintain the USD/CHF above 0.8200 could open the door at higher prices.
Despite this, the way of lower resistance is down. The first support is 0.8200, followed by the minimum of May 7, 0.8184. In case of greater weakness, the following support observed is 0.8034, the minimum of the year to date (YTD).
On the contrary, if the USD/CHF rises above 0.8250, look for a 0.8300 test. With greater strength, the following resistance would be the Simple Mobile (SMA) of 50 days of 0.8376, followed by the mark of 0.84.
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 Although the link is no longer in force, the fate of the Swiss Franco tends to be highly correlated with that of the euro due to the high dependence of the Swiss economy of neighboring Eurozone.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.
