USDCHF Forecast | Preparing for the publication of significant statistics in Switzerland | IFCM

Technical Analysis USDCHF : 2020-01-27

Recommendation for USD/CHF:

Buy
Strong SellSellNeutralBuyStrong Buy

Above 0,973

Buy Stop

Below 0,961

Stop Loss

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IndicatorValueSignal
RSI Buy
MACD Buy
Parabolic SAR Buy
Bollinger Bands Buy
MA(200) Neutral

Chart Analysis

IFC Markets Tech Analysis

The USDCHF bounced off the lower boundary of the neutral range and overcame the line of the short-term downtrend. Now it is trying to move towards the upper boundary of the neutral range. Some indicators formed buy signals.

The bullish momentum may continue if the USDCHF exceeds the last fractal high at 0.973. This level can be used as an entry point. The initial stop loss may be placed below the last fractal low, the minimum since September 2018 and the Parabolic signal at 0.961. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level (0.961) without reaching the order (0.973), we recommend closing the position: the market sustains internal changes that were not taken into account.

Investors do not exclude foreign exchange interventions by the Swiss National Bank (SNB). Will the USDCHF rise?

Fundamental Analysis

Such a movement means the weakening of the Swiss franc against the US dollar. Some market participants noted an increase in cash on the SNB balance sheet and assumed that it might interfere in trades. Swiss National Bank (SNB) Chairman Thomas Jordan stated that his department had not carried out currency interventions with the aim of weakening the franc. He noted that a negative rate of -0.75% was a necessity for Switzerland. Earlier, representatives of the SNB said that the Swiss franc is overvalued. It is now at a 33-month high against the euro. Important economic data will be released in Switzerland this week: trade balance for December, the ZEW and KOF business activity indicators, retail sales and volume of foreign exchange reserves. They may affect the dynamics of the Swiss franc.

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