How Far Will the SNB Allow the Swiss Franc to Appreciate?

More signs of an economic recovery in the U.S. including better thanexpected bank stress test results and indications that the rate of U.S.job losses was shrinking encouraged Swiss Franc traders to repatriatetheir U.S. investments back to Switzerland.  Will the Swiss National Bank continue to allow the Swiss Franc to continue appreciate?

More signs of an economic recovery in the U.S. including better than expected bank stress test results and indications that the rate of U.S. job losses was shrinking encouraged Swiss Franc traders to repatriate their U.S. investments back to Switzerland. This was another sign that the U.S. Dollar is losing its safe haven status.

Technically the weekly trend is down and expected to continue to work lower now that the market has been able to breakaway from the congestion zone at 1.1562 – 1.1335. This area is now resistance.

Based on the long-term range of .9647 to 1.2299, investors should look for this current break to continue down to the next retracement zone at 1.0973 to 1.0660. The close on the weekly low combined with the downside momentum indicates 1.0973 is a likely target next week.

The lingering question all Swiss traders face is will the Swiss National Bank become an active seller if its currency continues to appreciate. The SNB remains firm on its stance to revive the Swiss economy through an increase in exports and to prevent deflation. Its weapon of choice remains aggressive intervention.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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