USD/CHF Forecast March 12, 2012, Technical Analysis

The USD/CHF pair rose rapidly during the Friday session as the market bought the US dollar on the whole. The Non-Farm Payroll numbers were better than expected, and as a result the world ran to the USA. The pair ran directly into the 0.92 resistance level, the same spot it saw trouble a few days ago. The market however, looks bullish to us as the bounce from the 61.8% Fibonacci level has been so strong. Also, the Swiss National Bank is working against the value of the Franc in the EUR/CHF pair, and any action in that pair could push this one higher.

The US economy is improving, and is one of the few in the G-10 that seems to be showing any real signs of strength at the moment. This of course attracts money and in investment into the country as traders and investors run from places like Europe and Latin America. The Dollar also have the ability to offer “safety” in uncertain times, so it will continue to get a bid in general as the headlines of such uncertain times continue to go back and forth as for risk assessment.

On the other side of the equation, the Swiss have the misfortune of sending over 80% of their exports to the European Union. This will continue to hurt the Swiss economy as the EU is heading into a recession in several of the members. The flow of money out of Switzerland is also being helped by the fact that there are a lot of banking changes going on there as well, and this could continue to be a catalyst for this market to rise.

The bounce came from the 50% Fibonacci level, and this would jive well with our theory that the majority of market movers are paying attention to the recent uptrend as opposed to the longer-term downtrend. With the SNB in the way – we figure that buying is the only thing to do. We would be comfortable buying above the 0.92 level, and on pullbacks that produce supportive candles.

USD/CHF Forecast March 12, 2012, Technical Analysis

Written by FX Empire