The SNB will not be too happy about the USD/CHF and EUR/CHF exchange rate


  • USD/CHF is trading just under flat on Monday at 0.9079.
  • The pair is relatively weak and potential SNB action is on the cards.

Fundamental backdrop - USD problems for the Swiss National Bank (SNB)

Since the post coronavirus high of 0.99017, the pair has now fallen a massive 8.25% in 179 trading days. This poses a problem for the Swiss National Bank as they will struggle to get hold of their inflation rate (too low) and swiss exports could become too expensive. 

The big question is what can the SNB do? They have used negative interest rates, QE and asset purchases of various kinds. Maybe the SNB were looking for some help from the ECB, but it never came. There has been some verbal dissatisfaction against the strong EUR but the fact that there was no policy action might have disappointed the SNB. Some ECB action could have helped the franc (CHF) as it would have meant some broad USD strength against a whole basket of currencies. The EUR/CHF rate is more important for the SNB and there has been lots of CHF strength there too but the structure of the EUR/CHF chart is slightly better than the USD/CHF chart from an SNB perspective. 

USD/CHF daily chart

Looking at the daily chart, there is a firm consolidation a very low levels. The price looks to be heading back to the 0.90 area once again and the price has been supported there twice before. The if the green support level is broken the price will be trading at its lowest level since 26th January 2015. This was when the price was recovering following the SNB cap removal on 15th January 2015. 

The indicators are showing a bullish divergence this is when the indicator waves make higher lows and the price makes lower low waves. Although this can be a bullish signal it does often indicate that the momentum of a move is slowing down and not always a sign of a reversal. Much of the USD move will depend on this weeks FOMC meeting. If the Fed signal they are going to be more accommodative or sound more bearish tones this CHF strength could continue and force the SNB to act yet again. 
 

USD/CHF SNB intervention

Additional levels

USD/CHF

Overview
Today last price 0.9081
Today Daily Change -0.0007
Today Daily Change % -0.08
Today daily open 0.9088
 
Trends
Daily SMA20 0.9099
Daily SMA50 0.9192
Daily SMA100 0.9398
Daily SMA200 0.955
 
Levels
Previous Daily High 0.9108
Previous Daily Low 0.908
Previous Weekly High 0.92
Previous Weekly Low 0.9049
Previous Monthly High 0.9242
Previous Monthly Low 0.8999
Daily Fibonacci 38.2% 0.909
Daily Fibonacci 61.8% 0.9097
Daily Pivot Point S1 0.9076 
Daily Pivot Point S2 0.9063
Daily Pivot Point S3 0.9047 
Daily Pivot Point R1 0.9104
Daily Pivot Point R2 0.912
Daily Pivot Point R3 0.9133

 

 

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