April Slopes In the Swiss Alps

Introduction

Switzerland is a brand country, which gained a lot and established a developed economy. The citizens of this country have a very balanced and sober view of the world. It is impossible to tell you about all the great things about this country even in a book. However, we are not interested in all things, only it's Swiss Franc and what can we do with it. The Swiss Franc is a brand currency, which has a stable and strong base, good dynamics and seemed very conservative, especially in comparison with the US dollar, which moves likes a zig-zag without any negotiations.

A long way upwards allowed the US eagle to fly higher above the Alps leaving the majority of traders to ride over the correction slope and look for other entertainments. Largely, the dynamics of this instrument is dictated by the dynamics that result in different speed of augmentation of monetary supplies and demand for investments. Switzerland, by having negative interest rates, has significantly lower investment attractiveness than the US Dollar. Of course, it is not a great perspective to invest 100USD and receive only 99,25 in a year.

Analysis

Picture 1. A chart of USD/CHF for the period of 16.03.2019 - 16.04.2019.

As we can see in picture 1, the interest rate, economic factors, and relatively effective market constitute a real growth driver for the currency pair. If we consider forward price formation and future interest rates, we can see that for the upcoming period from 22.042019 to 29.04.2019, the rate will move from a red zone (the zone of the dollar growing) to a green one (reduction of the dollar price). Fundamentally, this may be considered as a factor for possible correction.

Picture 2. A chart of USD/CHF and the index of big traders for the period of 16.03.2019 - 16.04.2019.

On picture 2, we can see that the current situation does not move towards the correction, however, such a trend period is a very long one, even for such a stable instrument. The big traders also take advantage of the situation and increase long dollar positions as investments to generate profit from in the next week.

Signal

According to many factors that indicate correction proximity, we recommend to get ready for taking a ride on the slopes of correction, we expect the increase of the "lower" positions soon.