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USD/CHF: overdue correction in the dollar pairs _09/06/2016

Technical analysis and trading recommendations -

The main intrigue of the month - a referendum on Britain's membership in the EU - leads to an increase in demand for safe-haven assets such as gold, yen. Frank also, despite the fact that his role as a safe-haven currency has weakened in recent years, is in high demand on the background of the upcoming referendum in the UK and the general weakening of the US dollar in the market.

According to the data published yesterday, the consumer price index (the CPI) in Switzerland in May increased by 0.1% compared to April (forecast was + 0.2%, in April, the growth was + 0.3%). Compared with the same period last year, consumer prices fell 0.4% in May. It is likely that a long period of deflation in the country is still far from complete. However, the pair USD / CHF remains under pressure against the background of the general weakening of the US dollar in the currency market.

After disappointing data NFP May in the United States, published last Friday, investors have already ruled out raising interest rates in June and revise the likelihood the Fed tightening policy in July. Investors still consider it unlikely the Fed raising interest rates in the next few months. It is very likely that the Fed could do to refrain from raising interest rates in 2016. The US dollar on Wednesday fell to its lowest level in five weeks. the WSJ dollar index, which tracks the US dollar's value against a basket of 16 currencies, recently fell 0.5%, to 85.57, the lowest level since May 3.

If the current growth of the franc will be short-lived, the SNB may have recourse to intervention in the foreign exchange market to stabilize the franc.

If the flow of capital into Switzerland continue, the country's central bank may have to lower the rate on deposits with the current level of 0.75% for at least another 50 basis points.

In any case, near the level of 0.9500 is necessary to exercise caution when opening orders, especially to sell the pair.

Thursday, 09 Jun, 2016 / 10:48

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