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What to Expect From the Swiss Franc Index?


The Swiss Franc Index (SXY), during this year, reports gains near to 1.08% (YTD). On April 26, the SXY touched the lowest level at 97.7, advancing 5.02 per cent. In this post, we’ll review what to expect from the Swiss currency for the coming weeks.

The big picture

The Swiss Franc Index (SXY) long-term shows a failed breakdown of an ending diagonal structure which found support at 97.7. Once the price touched the bottom on April 26, the SXY started a bullish sequence. The upward move has created five waves, but we expect fresh highs. The RSI oscillator confirms the bullish bias due to the absence of exhaustion signals.

Our forecast

The 4-hour chart confirms that the uptrend is intact. However, analysing with the key Fib levels, the SXY is in the first resistance at 102.6 (161.8%). The next exhaustion area is between the 103.4 and 104 levels. The RSI above the 80 level, give us a clue that the Swiss Franc Index is in a relevant resistance and should start to retrace soon.

In our main scenario, we expect a corrective move in three waves, which could impact the region between 100.8 and 100.2 level. From this area, the price could start to bounce again, developing a new upward cycle of higher degree.

The alternative scenario is if SXY strikes the area between 103.4 and 104. If this occurs, the move could be marginal, but the corrective move should be more volatile than the first scenario. The invalidation level for the bullish scenario is at 98.8 level.



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