Swiss deflation deepens in February – GrowthAces

FXStreet (Barcelona) - The GrowthAces Research Team reviews the Swiss CPI and foreign exchange reserves data, and further gives the key technical levels for EUR/CHF.

Key Quotes

“Swiss consumer prices fell 0.8% yoy in February vs. a decline of 0.5% yoy in January. The main source of this fall is deflationary pressure generated by stronger CHF. On January 15, the Swiss National Bank stunned markets by dropping its cap of 1.20 for the CHF against the EUR.”

“Switzerland's foreign exchange reserves hit a new high in February. The Swiss National Bank said it held CHF 509.250 billion in foreign currency at the end of February, compared with a revised CHF 498.463 billion francs held the previous month.”

“A strong rise in reserves raised the suspicion that the central bank was still intervening.”

“However, we should note that the rise was largely due to a CHF depreciation in February, which made the bank's foreign currency holdings more valuable.”

“Significant technical analysis' levels for EUR/CHF
Resistance: 1.076 (high Mar 3), 1.08 (high Feb 25), 1.0811 (high Feb 20)

Support: 1.0630 (low Mar 4), 1.0610 (low Feb 27), 1.0554 (low Feb 16)”