A combination of short term USD strength and expectations of additional SNB action may propel the USD/CHF above the approaching resistance.
Yesterday SNB Governor Thomas Jordan did his best to back down market expectations of another move by the SNB to raise the floor underneath the EUR/CHF exchange rate. Following Thomas’ comments the CHF strengthened accordingly. Thomas suggested that the floor is temporary but the SNB is not likely to back down from its program to weaken the CHF. This is especially true given the deflationary forces that are apparent in the Swiss economy.
As such the USD/CHF is currently approaching resistance of 0.9080 off of the October 20th high. A break here and the pair could move towards the October high of 0.9318. Support is back at the 20-day moving average of 0.8870.
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Russell Glaser is a Currency Analyst with ForexYard. Russell provides analysis in the FX spot market by employing fundamental research methodologies. In addition to currencies, Russell closely follows the correlation between the Commodities market and the movement of equities. His writings have been published on the ForexYard Trading Blog and associated partner sites. Prior to joining Forexyard, Russell Glaser served as a management consultant in the financial services industry, advising Fortune 100 companies. Russell holds a degree in finance from the Fisher College of Business at The Ohio State University.
