The rates continue within the downward trend formed more than a year ago. At the same time, we see a gradual decrease in volatility and a narrowing of the range. Despite the rise in oil prices, as well as the economic downturn in the EU, the Swiss franc in the long term was more stable and less exposed to negative factors, confirming its status of a safe asset.
After a busy last week, we are seeing a certain calm on the market, which will continue next week. Last week the CHF strengthened slightly against the CAD amid the soft rhetoric in the Bank of Canada, which decided not to change the rate. The Central Bank noted the increased risk of a slowdown in the global economy, as well as the slowdown in the economy of Canada. Recent reports show a worsening on the real estate market. Also, job growth was worse than expected. A previously published report showed a quarterly GDP growth by only 0.4%, which shows that the economy is not growing all that much. At the same time, negative economic reports have not yet significantly affected the cost of the CAD, which is now supported by rising oil prices. To date, CL/WTI oil has reached the level of 57 dollars per barrel and has all chances to rise in price and reach the level of 60 dollars, with the toughening of sanctions against Venezuela, as well as with plans to completely stop the export of oil from Iran to 0.
The CHF changed in price only under the influence of external factors with the lack of any new data on the Swiss economy. As for the situation in the EU, the latest report showed a higher increase in industrial production output than expected in January. This is certainly a positive signal, but not enough to definitely talk about the recovery of the EU economy after a period of recession. Therefore, investors are looking forward to new reports, in particular the PMI business activity index in the Eurozone, which will be published on March 22.
In this situation, the most effective would be the deals on the trend, in the medium and long-term perspective. This is confirmed by the Stochastic oscillator, indicating the rates in the overbought zone. The MACD at the same time is at 0 level, but is aimed at entering the negative zone.
