USD/CHF Analysis, March 31

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By FXCompass — Wednesday, 31 March 2010

FUNDAMENTAL ANALYSIS

Neutral Recommendation The USD/CHF dropped heavily amid a mixed set of U.S data on Wednesday. The pair is back to the 1.05 region and continues to be very volatile.

The Swiss National Bank still has not intervened to prevent further stregthening of the CHF against the euro. Traders are unsure about what the SNB will do next. Although an intervention is expected, many think it might not be strong enough to stop the risk-aversion effects. The EUR/CHF is now at a record low level and its drop isin't expected to ease in the short term.

Against the dollar, the CHF should continue to either depreciate or advance depending on the general market conditions. Any positive U.S. data is likely to bring new long postions. On the other hand, negative news could trigger stop loss orders and send the pair back below 1.050.

TECHNICAL ANALYSIS

The USD/CHF dropped with momentum on Wednesday to reach the 1.0512 support. Even if the presence of three black crows candles is very bearish, the recent volatility and the upcoming payroll data on Friday prevent us from issuing a recommendation,

Support and Resistance

R1: 1.0645	S1: 1.0512
R2: 1.0700	S2: 1.0355

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