The USD/CHF is a nice currency pair in the binary options market. The Swiss Franc is a safe currency hence can be trusted in times of market setbacks. When a crisis hits either European markets or the United States, the Swiss Franc acts as the safest instrument to protect the investments. The rates of the currency were cut by the Swiss central bank due to the claim that it was overvalued. The bank, therefore, had to support the domestic economy.
The trader needs to know that the SNB is the major driver of the USD/CHF currency pair. Furthermore, there are important economic releases in Switzerland to consider. For instance, the Swiss Franc is involved in domestic economic fluctuations, a case that tends to be natural on other national currency. Switzerland is not part of the European Union but it is a major exporting nation.
The traders should be aware of the LOL indicator and consumer price index. The factors are important as they provide ideas regarding the SD/CHF price and the dire of the future of the Swiss economy. The meetings of the Swiss National Bank conclude with press conferences and in times of great surprises, there is always a fluctuation in the currency.
There are essential economic releases to be watched in the United States. The U.S. has the largest economy in the world. The key indicators of the economy are the Nonfarm Payrolls which is released each month. Besides the consumer prices, the index is important as it outlines inflation. The index possesses the largest share of the GDP. The ISM index in both the Non-Manufacturing and Manufacturing sectors, retail sales, GDP growth, private payrolls of the ADP, producer price index, among others are important to consider.
The trader should be aware of the decisions of the Central Banks in both the Swiss National Bank and Federal Reserve in the United States. After every six weeks, the Federal Open Market Committee (FOMC) holds sittings. The meetings are vital to the traders as they portray the future projections.
Switzerland has a tiny economy but possesses a very strict banking policy. The case can affect the price movement of the Swiss Franc. The reason is due to the fact that the country is politically neutral and supports financial security and privacy. There is a regular release of the GDP data that have an impact on the CHF. Details regarding inflation rates, industrial production, retail sales, trade balance and employment figures are provided.
A contract for difference (CFD) is a financial tool mainly between an investor and a broker. In the situation, one party accepts to pay the other one the difference in security value at the start and end of the trade. One should speculate the direction of the available asset in order to trade the USD/CHF currency pair. For instance, if the trader thinks that the USD will appreciate then buying the CFDs is recommended.
Best Time to Trade the USD/CHF
The USD/CHF forex market is open 24 hours daily. However, the UK trading is most active from 8:00 AM to 5:00 PM. In the United States, the Swiss Franc provides trading opportunities from Sunday evening all the way to Friday afternoon. The case offers great chances of making good profits. The setback is that the volatility and volume can change greatly in each day cycle. The case leads to widening of the spreads in little popular pairs and narrowing in times of active moments. Majority of traders take advantage of USD/CHF and EUR/CHF crosses. The case enhances a tight spread in the entire 24-hour cycle.
Furthermore, the many intraday catalysts influence trends in all directions all the time. Short-term and long-term swings relate well with the classic range-bound strategies such as channel and swing trading. Most of the Switzerland and Eurozone economic data US made available between 2:00 AM and 5:00 AM in the United States Eastern time. Prior to the release, from 30 to 60 minutes and one to three hours is the opportune time trade CHF crosses. The named time overlaps with the trading activities in the United States facilitating an ideal volume on both parts of the Atlantic.
It is with no doubt that the USD/CHF is an important currency pair to trade with. However, the ideal time to trade with the currency is before and after economic releases. The releases are scheduled between 2:00 AM and 5:00 AM ET. The other time frame is between 8:30 AM and 10:00 AM ET. The numerous reports ensure that the markets are both liquid and active between midnight and noon.