Lukewarm Swiss inflation readings yesterday may have been an early warning signal, as the SwissFranc went from a new weekly high to a sizable downside breakout during the course of the overnight session.Safe-haven support may come back into play if Washington budget problems continue to fester, but the SwissFranc may be on the verge of an extensive downside move over the next few weeks. The December Swiss mayfind support around the 109.78 area later in today’s session, and needs to find a fresh source of strength in orderto put the brakes on this current selloff.
Technical Outlook
CHF (DEC): Momentum studies are trending lower from high levels which should accelerate amove lower on a break below the 1st swing support. The close above the 9-day moving average is a positiveshort-term indicator for trend. With the close higher than the pivot swing number, the market is in a slightly bullishposture. The next downside target is now at 110.18. The next area of resistance is around 111.01 and 111.21,while 1st support hits today at 110.49 and below there at 110.18.