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US Dollar / Swiss Franc Tests Key Support Ahead of SNB Rate Decision
Thursday, 11 December 2008 04:04:53 GMT  |  Ilya Spivak, Currency Analyst
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The Swiss Franc is positioned ahead key support against the US Dollar ahead of the upcoming interest rate announcement from the SNB, with the central bank expected to slash rates by 50 basis points to bring rates to 0.50%. This will put borrowing costs at the lowest level in four years. USDCHF is now positioned squarely above the intersection of the 23.6% Fibonacci retracement of the 09/22-11/21 and a trend line in place since late September.

Interest rate decisions have produced counter-intuitive results in recent months, with rate cuts actually boosting the relevant currency as traders bet that aggressive monetary stimulus will put a country on track to recover faster from the global slowdown. To that effect, a rate cut and/or any indication that further easing may lay ahead has the potential to push USDCHF through trend line support to target the 38.2% Fib level at 1.1686.

12-10-08 usdchfCreated using FX Trek IntelliChart – Prepared by Ilya Spivak

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