The Swiss CPI came in unchanged for the year and down -0.1% on a month-over-month bases. Additionally, Industrial Orders dropped -4.2%. On the two year anniversary of the Swiss National Bank (SNB) Euro peg of 120, these negative reports remind us of why that peg was established. It almost gives reason for the SNB to up the peg in light of that two year anniversary. Since the peg was established two years ago one could argue very little has changed given the yearly inflation of 0.0%. After all, one of the reasons cited for the peg was deflationary pressures.
Technical Outlook
CHF (SEP): Momentum studies are declining, but have fallen to oversold levels. The market’s short-term trend is negative as the close remains below the 9-day moving average. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside objective is 104.95. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 106.41 and 107.23, while 1st support hits today at 105.27 and below there at 104.95.