USD/CHF is trading in a corrective trend around 0.9686, amid a decline in the American currency.

Nevertheless, there are also no signs of a stronger franc at the moment. Instead, the economic situation in Switzerland is rapidly deteriorating, and soon the country may face a severe energy crisis. 

At least that is what Michael Frank, director of the Association of Electricity Companies (VSE) of the country, said. According to him, the power outages were caused by a reduction in gas supplies from Russia and the shutdown of nuclear power plants in France for maintenance. Frank sees the only measure to stabilize the situation as a gradual reduction of resource consumption, which includes, in particular, limiting the lighting of shop windows and streets, and if this is not enough, then alternating shutdowns for four hours in certain regions. 

The Swiss authorities predict an increase in the negative dynamics of electricity prices. According to Urs Meister, head of the Federal Electricity Commission (ElCom), next year ordinary citizens’ bills may increase by an average of 20%. Such a conclusion was made based on the results of the survey of suppliers who intended to adjust prices by 47% upward amid increasing costs of coal; probable problems with exports from neighboring countries, and the global uncertainty regarding supply.

As for the US currency, it continues its gradual decline ahead of the next US Federal Reserve meeting and is trading at 106,800 points in the USD Index today. Negative pressure on quotations was put by the national labor market data, published the day before. 

Thus, the number of initial claims for unemployment benefits increased up to 251 thousand from 244 thousand a week earlier, which considerably exceeded the analysts’ forecasted cut to 240 thousand, and as a result the total number of citizens entitled to receive payments from the government grew to 1,384 million from 1,333 million last week. 

Support and Resistance Levels

On the global chart of the asset, the price is correcting within a sideways channel, preparing to continue its local decline. Technical indicators have almost turned around and gave a sell signal: fast EMAs of the alligator indicator are close to the signal line, whereas the AO oscillator histogram has already moved into the sell zone and continues to form downward bars.

• Support levels: 0.9652, 0.9530.
• Resistance levels: 0.9739, 1.0000.

Trading scenarios

Short positions should be opened after the final reversal, and continuation of the local decline of the asset, as well as fixation of the price below the level of local support at 0.9652, with the target at 0.9530. Stop-loss – 0.9710. Realization term: 7 days or more.

Long positions should be opened after the continuation of the global growth of the asset, as well as fixation of the price above the level of local resistance 0.9739, aiming at 1.0000. Stop-loss – 0.9650.