FX.co ★ Global macro overview for 22/06/2018

In line with market expectations, the Swiss National Bank announced that the deposit rate would remain unchanged at -0.75%. It is worth recalling that the deposit interest rate is at such a record low level since January 2015, which was then connected with the release of the franc exchange rate. At that time, hardly anyone expected such a move, however, more than two years passed from this event and the SNB seems to consistently pursue its monetary policy.

Global investors also learned, that the SNB is prepared to intervene in the currency market if the need arises. Negative rates remain at this moment an indispensable element of monetary policy. The GDP growth forecast remains unchanged at 2.0%. As regards inflation forecasts, there was a slight correction:

2018 - inflation at 0.9% (previous forecast 0.6%),2019 - inflation at 0.9% (previous forecast is 0.9%),2020 - inflation at 1.6% (previous forecast 1.9%).

The Swiss franc maintains its strength and signals from the global economy remain favorable. However, the SNB expresses its concern about the unstable situation in the currency market.

In conclusion, the SNB behaved as exepced, becuse it is really highly unlikely for the Swiss regulator to raise the interest rates before the ECB. Market participants are aware of this situation and were prepared for this turn of events: the CHF did not much react to the SNB decision and maintained its range to the majors.

Let's now take a look at the EUR/CHF technical picture at the H4 time frame. The market is trying to break through the golden trend line resistance and rally towards the next technical resistance at the level of 1.1552. The momentum is still below its fifty level, so this might be a false breakout. The key technical resistance is still seen at the level of 1.1580 and the key swing, which is very important for bulls, is seen at the level of 1.1656. The immediate technical support comes at the level of 1.1486 - 1.1479.