Forex Trading: USD/CHF And EUR/CHF Move Lower

The EUR/CHF and USD/CHF moved lower overnight despite a smaller Trade surplus and much weaker exports.  Exports fell -7.4% while imports also fell but by a smaller amount (-5.7%). The decline in exports was the worst since December 2008 when they fell -13.8%.   Last week, the Swiss governement cut 2009 growth to -2.7% citing weak exports.

Nevertheless, the Swiss Franc continues to get stronger.  The EUR/CHF fell to a low of 1.5020 and approaches the area most feel the Swiss National Bank will be concerned about on the downside. When the EUR/CHF and USD/CHF weaken, the CHF strengthens.  A stronger currency makes exports less competitive abroad. This could lead to lost sales abroad to cheaper domestic goods.  Switzerland export market is most tied to the European Union nations.

Meanwhile the USD/CHF is testing the support level from the wedge formation that has developed in June.  The trendline support comes in at the 1.0717 level currently.

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