Why A Short-Term Correction On USD/CHF Pair Could Happen


Switzerland is one of the most prosperous countries in the world. Its prosperity comes because of a number of reasons. Historically, the country has taken a neutral approach to global issues. In fact, it did not participate in the Second World War. As a result, the country continued to develop its economy as the other European countries rebuilt.

Second, the country is fully decentralized, which means that the laws are made at a local level. In fact, its president is not as powerful as other presidents. Third, the country has invested a lot in education that has made it one of the most advanced technology leaders. Its companies like Norvatis and Rolex dominate their industries. Last but not least, Switzerland is one of the most business-friendly countries in the world.

This year, the Swiss franc has lost significantly against the US dollar. This has been attributed to the aggressive policies being promoted by the Federal Reserve and the lax policies of the Swiss National Bank (SNB). The latter has continued to retain interest rates so low with the goal of easing the Swiss Franc. The goal of this is to support the Swiss economy, which derives a lot of income from exports. When a country’s currency is weak, it makes its products more affordable to the international market.

The USD/CHF pair reached a 12-month high of 1.012. In other words, it has found consolidation at the parity level. The double EMA shows that the pair could have a minor correction in the short term. This is confirmed by the RSI, which is currently at 51 and falling. If the pair moves lower, it will likely test the important 98.5. In the longer term, the pair could resume the upward trend.

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