CHF – The Swiss Franc is stuck in a narrow range

Swiss newspaper L'Agefi reported on Wednesday, citing Deputy Governor Antoine Martin, that the SNB's threshold for lowering interest rates to negative territory is higher than for cutting rates while they remain above zero. The SNB lowered its policy rate to zero in June and has not ruled out lowering it below zero if inflation is low, despite the bank's stated aversion to negative rates. However, Martin stated in an interview with L'Agefi that while past experience suggests negative rates can be effective, they also pose challenges for banks, investors, and households due to the increased risk-taking.

The USD/CHF pair remains stuck in a narrow range and has intersected with several medium- and short-term moving averages, suggesting a period of uncertainty. Support levels are expected to be 0.80 and 0.7910, with higher support expected at 0.7860 and 0.78. If the exchange rate can maintain its position above the 0.80 level in the short term, it may continue its upward trend. The downtrend line formed in recent months is at 0.8140. A break above this level would signal a reversal of the year-to-date decline. The price could then target 0.8220 and 0.8350.

Forecast range:
Resistance: 0.8140 - 0.8220 - 0.8350 - 0.8500
Support: 0.8000 - 0.7910 - 0.7860 - 0.7800

This Week's Headlines:
27/8
Swiss National Bank Vice President Martin expresses caution about the prospect of negative interest rates

Focus:
Friday
Swiss Q2 Consumer Confidence Index (3:00 PM)

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