Switzerland's trade surplus widened in June as a decline in the Swiss franc fueled exports of machines, watches and metals. Imports declined.
The surplus increased to 1.72 billion Swiss francs ($1.43 billion) from 1.04 billion francs in May, the Federal Customs Office in Bern said today. Economists expected a surplus of 1.15 billion francs, according to the median of five forecasts in a Bloomberg News survey. Exports rose 1.5 percent from May when adjusted for inflation and seasonal swings, and imports fell 5.3 percent. It's a ``significant widening'' in the trade surplus, said Holger Schmieding, chief European economist at Bank of America in London. ``The weaker franc as of late may be adding to growth in exports, but it's primarily a reflection of the strength of Switzerland's trading partners.''
The Swiss economy may expand about 2.5 percent this year after an estimated 2.7 percent in 2006, the fastest since the turn of the decade, the central bank said last month. That's above the government's growth forecast of 2.3 percent for 2007.

The following technical analysis gives us a detailed lookout on what is expected to happen to the pair.

The buying point of USD/CHF is at 1.2000; based on a strong support and a failure of making lower then the previous support at 1.1984


-Fibonacci retracement 38.2% is the first target taking profit at 1.2060
- Previous support will be the stop loss at 1.1960

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 upwards with the break of zero line. In order to find the power of the market, we use RSI (Relative Strength Index). In this example RSI is clear 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. The Stochastic oscillator breaks 20% line and moving upwards. Most of the indicators show us the strength of the US dollars against the Swiss Franc.

* 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