Last week the USD/CHF moved in a tight range most of the time, safe for a couple of sharp drops, occurring on Tuesday and Friday. The currency pair started the week around 0.96, moved along the 25-period moving average for a while, trying to break below it on several occasions, all of which proved to be unsuccessful. On Tuesday, however, the bears returned to the market and pushed the USD/CHF below its 25-period moving average and tested the lows we reached on August 23rd. After trading below 0.9541 for a brief moment, the currency pair started to shake off the bears and the bulls slowly regained their strength, trying to push the USD/CHF above its 25-period moving average once again. Their attempts initially met with significant resistance, but on Thursday the buyers’ efforts were finally rewarded and the Franc shot up, breaking above both its 25-period and its 50-period moving averages. On Friday, however, the comments of the Fed Chairman had a significant impact on the USD/CHF since market participants decided to shed their holdings of the U.S. currency, expecting a further wave of quantitative easing to be announced soon. The currency pair traded as low as 0.95 at one point during the session before paring some of its losses and closing at 0.9544. On the economic front not much was happening in the course of the week. The employment level figures were announced on Tuesday, coming at 4.07M, ahead of the 4.04M analysts were expecting. This was the indicator’s highest reading since March of last year. On Wednesday, the KOF economic barometer was released, also surprising on the upside, coming at 1.57. This is its highest reading since August 2011 and is much better than the 1.41 number, which we received in July. Analysts were expecting a much more modest increase to 1.51. This week is much busier in terms of economic news for the Swiss Franc. Today we had the retail sales being announced in the early hours of the session, coming at 3.2%, and well below the 3.5% economists were projecting. To make the matters worse, the figures for July were revised on the downside – from 3.7% to 3.3%. Despite the bad data, the Franc traded almost unchanged all day long as markets remained quiet since the U.S. were celebrating Labor Day. Towards the end of the day the Franc even appreciated against its American counterpart, touching rates of 0.9517 at one point. Traders, who intend to take advantage of the swings in the currency pair, are advised to monitor closely the GDP figures, which are scheduled to be released tomorrow and the CPI figures, scheduled for Wednesday.

Technically speaking, the currency pair is currently testing the lows it marked in the second part of August. The economic news, scheduled for later this week, will probably be of significant importance of whether we push below those lows or bounce off of them. On the way up the 25-period and the 50-period moving averages are acting as a resistance and so is the psychologically significant 0.96 level. Oscillators are in the lower part of their respective ranges with the relative strength index at 37 and the stochastic at 33. The MACD is below the key 0 level, but it is well off of the lows it touched in the second half of August.

Source: binaryoption