Historically, the Swiss Franc has been considered to be a “Flight to Safety”.  In other words, as risky assets begin to sell off, such as stocks, one may consider selling the USD and buying CHF.  Therefore, selling USD/CHF makes sense when there is a risk off move.

However, over the last few years the Swiss National Bank has given the market reason to reconsider this thinking.  (To be more specific, the unreliability of the SNB began on January 15, 2015 when the SNB depegged the Euro from the Swiss Franc and EUR/CHF began to freefall).  Since then, the SNB has been intervening in the currency markets to prop up the Swiss Franc pairs. 

Therefore, when we see risk off moves these days, the Swiss Franc is not necessarily considered to be the “Flight to Safety” that it once was.

USD/CHF has been in an upward channel since March of 2018.  On Monday, the pair broke lower through the bottom Trendline at .9735, and quickly bounced back into the channel the next day, creating a false breakdown.  In addition, the RSI is now diverging from price, and the pair put in a lower level on price, however a higher level on the RSI. 

USDCHF

 

Source: Tradingview, FOREX.com

A move above resistance at .9780, which is the 38.2% retracement level from the .9977 high on August 1st, to the low of .9658 on August 6th, may be a signal to buy USD/CHF. 

USDCHF

 

Source: Tradingview, FOREX.com

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

Latest Forex Analysis

Editors’ Picks

GBP/USD extends gains toward 1.31 after upbeat UK wage figures

GBP/USD is extending its gains and advancing toward 1.31 after UK wage figures beat expectations with 3.2% annually. The unemployment rate remained at 3.8% in November. 

GBP/USD News

EUR/USD recaptures 1.11 amid upbeat German figures, USD weakness

EUR/USD is trading above 1.11 after the German ZEW Economic Sentiment beat with 26.7 points. Presidents Trump and Macron agreed not to slap tariffs on each others' countries. The US dollar is retreating.

EUR/USD News

Market delays the trip to the moon

The crypto markets continue to turn to a new bullish phase. This turnaround began at the beginning of the year after a consolidation phase that started in mid-2019. 

Read more

Gold retreats from 2-week tops, drifts into negative territory

Gold failed to capitalize on its early uptick to near two-week tops and dropped to fresh session lows, around the $1560 region in the last hour.

Gold News

USD/JPY: Weaker near 110.00 amid China virus fears, BOJ's status-quo

The Japanese yen retains the bid tone following the Bank of Japan's (BOJ) status-quo, keeping USD/JPY under pressure near the 110 level amid risk-off market profile. S&P 500 futures drop 0.40% while the US Treasury yields are down over 1.50%, as the sentiment is hit by the coronavirus outbreak. 

USD/JPY News

Forex Majors

Cryptocurrencies

Signatures