Bearish on USD/CHF, targeting 0.9500 – Growth Aces

FXStreet (Barcelona) - The SNB fuelled USD/CHF climb was short-lived, having fallen 0.5% today, notes the Research Team at Growth Aces, as they remain bearish on the pair, targeting 0.9500 levels.

Key Quotes

“The Swiss National Bank said it was considerably reducing the number of institutions exempt from negative rates on their cash deposits held at the central bank.”

“Negative interest will now also apply to the so-called sight deposit accounts held at the SNB by enterprises associated with the Confederation, the Federal Pension Fund, and the SNB's pension fund, the central bank said in a statement. The bank said it would continue to monitor the remaining sight deposit accounts, such as those held by compensation funds for old age, disability, and loss of earned income, that are not subject to negative rates.”

“The SNB has clearly underlined its commitment to keep CHF pressured by tightening its sight deposit rules and warning the market that it may go for deeper negative rates. Accounts under negative rates will be looking elsewhere to put their cash, and the main destination will be probably the USD.”

“The USD/CHF rose above 0.9700 after the decision from nearly 0.9500 before the SNB statement and the EUR/CHF jumped above 1.0400 from 1.0250.”

“The rises were short-lived and are not continued today. The CHF is strengthening 0.5% against the USD and 0.4% against the EUR today.”

“We see that the demand for the CHF is still strong and investors are not afraid of the possibility of deeper negative rates in Switzerland.”

“In our opinion the USD/CHF is likely to go down in the coming days. We are looking to get short at 0.9690.”

“USD/CHF: sell at 0.9690, if filled - target 0.9500, stop-loss 0.9770, risk factor ***”