The Swiss National Bank (SNB) continues to show a trend of lowering interest rates.

The Swiss franc appreciated slightly after the SNB cut its interest rate by 25 basis points (bps), marking the third consecutive rate cut. However, some investors expect the central bank to cut interest rates by an additional 50 bps, following the Fed's decision to reduce rates at its most recent meeting. Moreover, some investors are awaiting clearer confirmation from the SNB regarding future economic trends.

In its September meeting, the SNB reduced its policy interest rate by 25 bps to 1%, bringing borrowing costs to their lowest level since 2023, in line with market expectations. Policymakers also stated that the central bank remains focused on movements in the foreign exchange market to ensure that domestic inflation slows down. Investors remain uncertain about the possibility of another rate cut in December, with some believing that the SNB will hold rates steady. Additionally, there is a view that the next rate cut, if any, would only be by 25 bps.

The SNB also forecasted inflation for 2024 at 1.2%, for 2025 at 0.6%, and for 2026 at 0.7%. The appreciation of the Swiss franc could directly affect imports and potentially drive domestic inflation higher again. Nonetheless, GDP growth projections remain around 1% for 2024 and 1.5% for 2025. Investors are closely watching for more economic data to better predict Switzerland's growth prospects.

Investor sentiment in Switzerland, as measured by UBS and the CFA Society Switzerland, dropped 5.4 points from the previous month to 8.8 in September. This figure reflects growing pessimism regarding Swiss economic growth over the next six months, as indicated by factors such as job announcements, household spending, and corporate profitability within the country.

Switzerland’s producer prices and import prices fell by 1.2% year-on-year in August, slowing from a 1.7% decline in the previous month. Additionally, the appreciation of the Swiss franc has supported lower import prices, with import costs decreasing by more than 3.4% on a monthly basis.

Techical analysis data (5H)

Resistance: 0.8447, 0.8485, 0.8505

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 0.8369 - 0.8389 but cannot break the support at 0.8389, you may set a TP at approximately 0.8485 and SL at around 0.8403 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 0.8447 - 0.8485, you may set a TP at approximately 0.8505 and SL at around 0.8369 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 0.8447 - 0.8485 but cannot break the resistance at 0.8447, you may set a TP at approximately 0.8369 and SL at around 0.8505 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 0.8369 - 0.8389, you may set a TP at approximately 0.8403 and SL at around 0.8485 or according to your acceptable risk.

Pivot point September 27, 2024 22:13 AM. GMT+7