Swiss Franc Ranging V.S. US Dollar

6:50 AM (EST) Update

USD/CHF Daily: Moving up towards  50% Fibonacci level  within a falling channel, below the Ichimoku cloud. 

Forex Trading idea: Too narrow a range to make meaningful profit intraday. Targeting 0.9044 and 0.89 in extension long-term below 0.9250.

Fundamentals:

The Swiss Franc Side: In Switzerland, the SNB (Swiss National Bank) has said that negative interest rates are working but that Mr. Swiss Franc is still overvalued. The central bank seems to remains comfortable maintaining this monetary policy for as long as necessary but may have to reconsider their approach to the FX market if they are to keep the Swiss Franc from getting stronger on the forex dance floor. They have been active in the FX market since removing the currency ceiling in January, but would understandably be reluctant to go back to a ceiling after the fallout of lifting it last time.

The US Dollar Side: US rate rises are looking less likely in 2015, as hopes start to fade that the economic data will bounce back in the second half of the year. The weather at the beginning of the year and the West Coast port workers strikes have left the country well below expectations on where it should be by now, with the concern that there isn’t going to be the momentum to get back to where they wanted to be as quickly. A move by the Fed in June is almost completely priced out of possibility in the futures market and the likelihood of a September hike is also diminishing, according to the same measure.

Technical Analysis: The USD/CHF confirmed the break below the Ichimoku cloud as well as 50% Fibonacci level which was our key pivot point and previous bearish target. However the US dollar paused to consolidate before reaching our bearish target of 0.9044 at 61% Fibonacci level.

Alternative Scenario: Above 0.95 with no bearish confirmation, look for up-moves towards 0.97

Where to set your stops and limits on the Daily Chart:

Support Levels Turning Point Resistance Levels
0.9044 0.9500 0.97
0.8900 0.9250 1.009

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