Traders bullish on the US Dollar could not have hoped for a better end to the week as the fuel for further uptrend on the USDCHF has been provided by Swiss National Bank Chairman Thomas Jordan on Friday.
The SNB Chair made comments about the bank’s interventionist policy on the Swiss Franc, stating that “stronger currency market interventions relieve over-valuation pressure on the Swiss franc and protect the Swiss economy,” Swiss National Bank Chairman Thomas Jordan said on Friday.
Jordan also noted the fact that the Swiss Franc was a safe-haven currency, usually attracting attention as search for such safe-havens occur when there is an increase in uncertainty. He also said that the “The scale of the SNB’s balance sheet has increased due to the intensive use of interventions,” adding that Switzerland was not a currency manipulator.
“Currency interventions are the most important instrument at the moment,” he added. These comments have stoked interest in the USDCHF, allowing bids on the US Dollar and offers on the Swiss Franc. The USDCHF is trading 0.55% higher on the day and sits at 0.91435.
Technical Outlook for USDCHF
The pair is now threatening to break out from the descending channel as the day’s candle tests the 0.91533 resistance (18 August high). A break above this level confirms the channel break and puts the pair on the path towards 0.92264, with 5/12 March lows at 0.93126 forming an additional feasible target to the upside. 0.94004 is also a possible barrier to further upside moves on the pair.
On the flip side, a rejection at 0,91533 could initiate a pullback move that retests the 0.90479 price support. A breakdown of 0.90479 brings in 0.89953 as a likely downside target. Further strengthening of the Swissy beyond this point brings in 0.89144 as an additional target to the south. This effectively breaks down the channel, but questions may then arise as to whether the SNB will allow the USDCHF pair to head down there without some form of intervention occurring, now that the SNB Chair has flown a kite.