Buying USD/CHF As the 200 MA Holds
USD/CHF is finding support at the 200 SMA and we decided to go long as risk sentiment improves, which should weigh on the CHF
The Swiss Franc has been bullish, although inflation remains under control in Switzerland, and the Swiss National Bank (SNB) started hiking interest rates pretty late. As a result, USD/CHF has been on a downtrend, but we saw a surge last as Swiss 10-year yields fell by 15 bps to 1.25%.
USD/CHF 5 Minute Chart – Buying Above the 200 SMA
Will we see a bounce off the 200 SMA soon?
There is an improvement in the sentiment, which is weighing on safe havens such as the USD and CHF. The market is feeling increasingly good about the outlook for Europe as the good weather continues. TTF energy prices went down another 7% yesterday and the economic data has shown some resilience. Italian retail sales posted a decent jump of 4.4% for November while Tuesday’s French industrial production numbers beat expectations. Today we saw the German Wholesale Price Index (WPI) post 1.6% decline, which is positive news for inflation in the future.
Latest Data Released by the SNB – 16 January 2023
- Total sight deposits w.e. 13 January CHF 536.2 bn vs CHF 533.5 bn prior
- Domestic sight deposits CHF 511.5 bn vs CHF 487.3 bn prior
A slight rise in overall sight deposits in the past week, sort of bucking the trend a little as the SNB is still smoothing things out while surreptitiously making tweaks to maintain policy effectiveness.
USD/CHF Live Chart
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