22.06.202009:58 Forex-elemzések és áttekintések: Analysis and forecast for USD/CHF on June 22, 2020

Dear colleagues,

The dollar/franc currency pair does not often come to our attention. Well, we will fill this gap, since the pair is quite interesting and is one of the main ones on the Forex currency market.

To begin with, I would like to remind you that last week, on June 18, the Swiss National Bank (SNB) held its scheduled meeting, following which it decided not to make changes to monetary policy and leave the key interest rate at the same level of minus 0.75%. This decision of the SNB fully met the expectations of market participants, so there was no particularly violent reaction to this event.

Let me remind you that the USD/CHF pair is interesting because both the US dollar and the Swiss franc are perceived by market participants as safe-haven currencies. At the same time, the strengthening of one or another currency occurs based on the relevant events and is interpreted in different ways. For example, during the height of the COVID-19 pandemic, it was the US dollar that was in demand as a protective asset. In my opinion, this factor took place due to the threat of coronavirus to the global world economy. During geopolitical tensions, natural disasters, and similar negative manifestations, the franc is usually in great demand.

Weekly

At the end of last week, the exchange rate of the dollar/franc pair has not changed much. "Swissie" strengthened with "American" by only 0.02%. Trading was conducted around the significant psychological and technical level of 0.9500 and eventually ended above this mark - 0.9518.

Thus, after the previous bearish candle with a very long lower shadow, last week there was a candle without a body - a natural model of "Doji". However, it is worth noting that the last candle has a long lower shadow, which indicates more effort that the players had to put into raising the rate. Well, the closing price above 0.9500 also contributes more to the expectations of strengthening the quote. However, due to the specifics of this currency pair, not everything is so simple and unambiguous.

Strong resistance is provided by the Kijun line of the Ichimoku indicator, located at 0.9541. Only the breakdown of this line and the closing of weekly trading above Kijun will signal the further readiness of the pair to move in the north direction.

Support is represented by the minimum values of the previous trades of 0.9462. If this level is broken and the current five-day trading closes below it, the next target will be 0.9375, where the lows of the previous week's trading were shown.

Daily

On the daily chart, the pair more than confidently settled under the lower border of the Ichimoku indicator cloud and began to consolidate. As a rule, after such consolidations, there is a directional movement in one of the parties. Today's trading of USD/CHF started with a moderate decline. If it continues, the pair risks falling to the area of 0.9463, where the Tenkan line passes and the horizontal support level. If bullish reversal candlestick patterns appear here, this will be a signal to buy the dollar/franc.

In the case of an upward reversal from the current values (0.9505), the pair will most likely head to the area of 0.9540-0.9550. If bearish candles appear in the designated area, signaling a likely decline in the exchange rate, we will sell. This forecast is designed for a weekly trading cycle, so you should not rush, and it is better to open deals only after receiving confirmation signals.

Good luck!