USD/CHF:  Current 1.0509 (Sunday, Aug 14, 2010).
 
Trend: Volatile Sideways.

Outlook: Some more upward correction expected with volatile sideways movement.

Please refer daily charts and not short-term charts e.g. hourly charts.

Fundamentals (Recent economic releases):

1) US: Monthly Budget Statement release though slightly better than the expectations but much less as compared to the previous release.
2) US: Consumer Price Index (CPI) data better than previous release.
3) US: Retail Sales releases showed less than expected data but much better than the previous releases.
4) US: Economists at Morgan Stanley reduced their estimate for third-quarter consumer spending (Consumer Spending: 70% of the US economy).
5) US: unemployment rate close to a 26-year high.

6) Swiss: Switzerland’s economy is picking up as government data showed on 6th of August. The data showed that unemployment dropped to the lowest level in over a year last month and the central bank in June raised its 2010 growth forecast to about 2 percent.
7) Swiss: Economists expect that SNB will raise the interest rates before ECB.
8) Swiss: Not many market moving releases during the past week.

Technicals and market perception:

1) ADX: +DI line crossed over –DI line but running flat.
2) Ichimoku Cloud: After long USD/CHF could pierce through the lower edge of the cloud before getting resistance there.
3) Daily MACD line staying above the signal line it but running flat.

Analysis/Outlook:  For the coming week we stay neutral for USD/CHF and though expect some extended sideways movement, we also expect some more upward correction towards 1.6260 if the support level of 1.0460 is not broken.

Our near-term outlook will change to somewhat bullish only if USD/CHF breaks above 1.0676. If USD/CHF breaks above it then we would expect a further upward move towards 1.0750.

Though we are staying neutral but our outlook will once again turn to bearish if on the downside USD/CHF breaks below 1.0330 (August 6th support). This will make our previous bearish outlook stronger with the possibilities of USD/CHF to test first 1.0220 and then possibly 1.0125 (January 10th 2010) level.

In case of some upward consolidation we would expect strong resistance at 1.0553 and then 1.0600. If these resistance levels are broken then the currency pair may move towards 1.0752. But we would still call it a correction and overall, as we mentioned, we are expecting another bottoms first towards 1.0220 and then possibly 1.0125.

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For short term Forex trades, please refer to daily technical analysis for USD/CHF.

(Please note that the color (colour) codes used to show outlook are for the currency pairs and not any individual currency)