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The Swiss franc is one of five Major currencies. However, this isn't because of its trading volumes: USD/CHF accounts for just 4% of global foreign exchange volumes (less then than USD/GBP, USD/AUD or even the USD/CAD currency pairs).
Instead, the Swiss franc acts as a safe haven - a currency that investors turn to as a store of value rather than a source of capital appreciation at times of market turmoil. For example, the Swiss franc appreciated by 15% against the Dollar from 1.1964 on July 1st to 1.3779 on August 11th following the downgrade of the United States' credit rating by Standard & Poor's.
Switzerland's neutrality, stable political system and secretive banking system make Switzerland a popular destination for risk-averse investors. However, the currency's long standing ties to gold also explain its role as a store of value. Formerly, the Swiss National Bank (SNB) was required to redeem banknotes into gold on request. Until 1997, the Swiss constitution required that at least 40% of the currency be backed by gold reserves. Since, a constitutional amendment lowered the threshold to 25% and the bank's gold reserves have fallen. However, the Swiss franc maintains to this day a strong positive correlation with gold. When the price of gold rises, the Swiss franc is likely to appreciate in response.
The US Dollar was seen trading lower against the Swiss Franc, as it moved below 1.0080. There is a bearish trend line formed on the hourly chart of USDCHF, which acted as a resistance near 1.0122 and pushed the pair down. The US Initial Jobless Claims ... More »
Long entry after bullish price action on the H1 time frame following the next touch of 1.0050 or 0.9993. Place the stop loss 1 pip below the local swing low. Adjust the stop loss to break even once the trade is 20 pips in profit. Take off 50% of the ... More »
USDCHF (1.0069): USDCHF posted a strong reversal off the 1.0061 – 1.0014 support level and could see a near-term move to the upside. Expect USDCHF to continue making a minor correction to the upside towards 1.0231 – 1.0166 region where a potential ... More »
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