The markets have hope again…?

The recent economic data from the U.S. was mixed at best. After all, consumer spending rose in July, much stronger than expected. But will this remain so? Probably not, because that consumer confidence fell in August to its lowest level since April 2009 – and that put the U.S. deep into recession. The hope for further bond purchases by the U.S. central bank, and other monetary policy measures, will calm the markets short term but it is crucial the data must be improved longterm. There could be further setbacks in the coming days and that would push investors further into the arms of the franc and the yen as they look for safehaven investments.

Is the SNB on the fight against the strong Swiss franc?

USD / CHF dropped after the rally in the last three weeks significantly. The resistance at 0.8200 CHF apparently proved too strong. The upward pressure on the franc increased even more after the Swiss National Bank (SNB) currently doesn’t look like they want to intervene against the strength of the currency again. USD / CHF is likely in the short term to find support at 0.8000, but could then fall further to 0.7850 CHF. Only with a substantial acceleration of the decline is the SNB expected to intervene again.

- Jeff

Jeff Young is the senior technical analyst at AppliedFX.com, please leave your feedback and comments on this article using the form below.