• The USD/CHF is flirting with the 0.9745 monthly resistance
  • The Swiss Franc gained power over the Euro last few weeks
  • 38.2 Billion dollars of losses reported by the SNB on Thursday
38.2 Billion dollars of losses reported by the SNB on Thursday

Technical Analysis:

Monthly Time Frame:

Two levels define the channel that the USD/CHF has been ranging since 2015, 1.0235 & 0.9180. These two marks are acting respectively as monthly resistance and support. The price could not break either of these levels. The USD/CHF was hovering around, with no success of closing above or below one of these levels. 

Another significant level is mid-mark 0.9745, where the price is trying to breach it to close above it. If this level is broken, a bullish bias will be established.

USD/CHF - If this level is broken, a bullish bias will be established.

4-Hr Time Frame:

Zooming in to a smaller time frame might help ascertain which direction the USD vs CHF might take.

A big 4hr candlestick succeeded to close above the 0.9745 monthly resistance, which indicates that the bulls are taking control. 

For a safe trade, it is better to wait for consolidation above the 0.9745 mark, as a confirmation of a bullish movement.

In case it was a false breakout, the price might rebound and go downward by breaking out of the blue trendline.

The 100 Moving Average is showing a bullish sentiment since the price is moving above this line.

USD/CHF - The 100 Moving Average is showing a bullish sentiment since the price is moving above this line.

Fundamentals Analysis:

On April 23, the SNB declared a loss of 39.34 billion dollars (38.2 billion Swiss Francs) amid the pandemic crisis that caused a decrease in value of its portfolio (foreign currency holdings & shares).

It is the most significant quarterly loss faced by the Swiss National Bank since 1907.

“The first quarter of 2020 was dominated by the global spread of coronavirus,” the SNB said. “The measures taken to contain the pandemic seriously impacted the financial markets from mid-quarter onwards, and accordingly also the SNB’s result.”

Reuters

Since the yellow metal is considered one of the safe-haven assets, the SNBN’s gold rose in value of more than 2.8 billion francs since the beginning of the pandemic.

Could the reopening of the American economy soon, lead to the appreciation of the greenback over the Swiss Franc?