The Swiss franc fell against the Euro for a third session as global stocks rose and investors bought assets with funds borrowed in Switzerland's currency.
Investors entered into so-called carry trades after the U.S. Federal Reserve said a six-year economic expansion won't be derailed by defaults on subprime mortgages.
``It's still bad news out there for the Swiss franc,'' said Kamal Sharma, currency strategist at Bank of America in London. ``Carry trade is coming back into play. The Fed allayed market concerns that they are thinking the credit problem is spreading into the wider economy.''
The franc stayed lower even after a report today showed Switzerland's unemployment rate in July held at the lowest in almost five years.
The Swiss National Bank has raised its benchmark interest rate seven times since late 2005 to 2.5 percent. Investors expect two more SNB increases this year. The implied yield on the three- month futures contract expiring in December rose 2 basis points to 2.99 percent today.
The Swiss official rate is the second-lowest among industrialized nations after Japan, and compares with 5.25 percent in the U.S., 5.75 percent in the U.K., 4 percent in the Euro region, and 6.5 percent in Australia.

The following technical analysis gives us a detailed lookout on what is expected to happen to USD/CHF.

The buying point is at 1.1974; based on a strong support which was previous resistance.
- Fibonacci retracement 61.8% is the take profit at 1.2011
- Fibonacci retracement 38.2% is the stop loss at 1.1923

The selling point is at 1.1923; based on a double top formation.
- Fibonacci retracement 23.6% represents the take profit at 1.1886
- Previous resistance will be the stop loss at 1.1974

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 above the zero line, the shorter term moving average is faster than the long term and is pointing downwards. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI, we can determine that the market breaks the uptrend line.

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 downwards. The Stochastic oscillator breaks 80% line and moving downwards.

* 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