In the time periods of instability in the world financial markets, Swiss Franc is always in high demand. Today’s macro-economic statistics showed that although producer price index and imports fell in Switzerland (-0.8% on monthly basis and -6.0% on annual basis) in May, retail sales in April rose by 1.6% in real terms against the forecast of decline by 2.8%. Note also, that following breakdown of negotiations between Greece and European creditors, index Stoxx Europe 600 fell by 0.8% at the beginning of trades, German DAX 30 fell by 1.3% and French САС 40 dropped by 1%, and British FTSE 100 decreased by 0.5%. Nevertheless, Franc is growing due to expectations of the future US Fed decisions, which will be adopted at the US Fed meeting on Wednesday. Despite strengthening in the USD in the pairs with the Asian currencies, the pair USD/CHF is traded in flat at the opening price.
Today’s important news will include a speech of the head of ECB Mario Draghi and US data on the industrial production for May.
Support and resistance
In the last two months the pair USD/CHF is traded in the narrow range between the levels of 0.9400-0.9300. From the top the movement in the pair is limited by the levels of ЕМА200 and ЕМА144 (daily chart) and the price level of 0.9450, and from bottom the movement is limited by the lows of the year at the level of 0.9100.
On the daily chart Stochastic is in the oversold zone; while OsMA is in the sell zone but in the neutral position near the zero line. On the four-hour chart OsMA is in the sell zone and the upward movement in the pair is limited by the lines ЕМА144 and ЕМА200 at the levels of 0.9365-0.9400. The pair is moving in the flat with a bias for the short positions.
Support levels: 0.9200 and 0.9245.
Resistance levels: 0.9370 and 0.9450.
It is advisable to open short positions at the current price level and from the levels of 0.9365 and 0.9400 with the targets of 0.9245, 0.9200 and 0.9120. Breakdown and consolidation of the price above the level of 0.9450 will make sense to open long positions with the targets of 0.9550, 0.9720, 1.0000 and 1.0100. A lot will depend on the interest rate decision and comments by the US fed on Wednesday.