Finotec News Archive - September 04 2007
Euro comeback; weakens Swiss franc.
EUR/CHFAnthony Boyajian 
04 September 2007
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The Swiss economy powered ahead in the second quarter, driven by strong domestic demand, data showed on Tuesday, but interest rates might stay on hold for now as the impact from the financial market turmoil was unclear.
Switzerland's real gross domestic product (GDP) rose by 0.7 percent compared with the previous three month period, the State Secretariat for Economic Affairs (SECO) said, keeping the pace from the first quarter and beating economists' forecast.
But Deutsche Bank economist Klaus Papenbrock said market turbulence was likely to dampen growth given the importance of banks and insurers to the Swiss economy.
"But here we will see weaker figures in the second half of the year due to recent developments on the financial markets."
The SNB forecast economic growth of roughly 2.5 percent for 2007 at its last meeting in June, though the forecast was based on an unrevised 2006 growth figure of 2.7 percent. Revised data showed last week that the Swiss economy grew by 3.2 percent last year, the fastest pace in six years.
The following technical analysis gives us a detailed lookout on what is expected to happen to EUR/CHF.
The buying point is at 1.6440; based on a break out of the Standard Error Channel lower line.
- Previous Resistance will be the Take Profit at 1.6514
- Fibonacci retracement 61.8% is the Stop Loss at 1.6383
The selling point is at 1.6402; based on a breaking of the previous support 1.6422
- Previous support is the Take Profit at 1.6320
- Fibonacci 23.6% is the Stop loss at 1.6465
To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of the two moving averages below the zero line, the shorter term moving average is faster than the long term and is pointing upward. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI, we can determine that the market is in an uptrend.
The momentum oscillator is very important to understand the strength of the market and as we see on the graph; it break the zero line upwards. The Stochastic oscillator breaks 20% line and moving upwards. William %R is giving us bullish signal with the break of -80% lines.
* The following analysis is for information only; Finotec is not responsible for any
decisions or misinterpretations based on the given text.
By Finotec’s professional analyst,
Tony B.
dealingdesk@finotec.com
Finotec Analysis Team
04 September 2007
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