With the Bank of England and European Central Bank slowly turning neutral, maybe it is time the market turned its attention to the Swiss franc again because the SNB is still pretty much dovish. Interest rates are unlikely to be raised anytime soon due to the lack of inflation in Switzerland. What’s more, the Swiss National Bank is still intervening in the forex markets as it firmly believes the franc remains overvalued.
The daily chart of the U.S. dollar/Swiss franc (USD/CHF) currency pair (see chart below) continues to show constructive technical signals as far as the bullish case is concerned. Obviously the biggest risk to any technical outlook is sudden changes in sentiment because of some fundamental stimuli, such as the ongoing Brexit risks and Friday’s US jobs report among others.
Worries that Britain could vote to leave the European Union in two weeks' time spread across the currency market on Friday, with the safe-haven yen hitting an eight-week high as investors ditched riskier assets for safety.