What I Need to Know to Trade the USD/CHF?

Posted by OliverPearson 0

USDCHF

The relation of the U.S. dollar to the Swiss franc or USD/CHF is quite a popular currency pair.

The base currency in the USD/CHF pair is the U.S. dollar. The Swiss franc in this pair is the quoted currency. This means that if the quote rises, the exchange rate of the Swiss national currency falls. Strengthening of the franc entails falling of the currency pair price and weakening of the U.S. dollar.

The Swiss currency is pretty stable and robust as well as the Swiss banks are reliable, and the Swiss watches are precise and durable.

 

However, this doesn’t mean that the exchange rate of the currency pair never changes. Indeed, the USD/CHF typically shows low volatility, but even its calm movements enable a trader to make a profit.

Analysis of the USD/CHF

USD-CHFGeopolitical tension. Negative developments worldwide can make the pair move down as investors start to change their U.S. dollars into the safe Swiss francs.

The factors having a significant impact on the movement of this currency pair are given below.

CHF

First of all, it’s worth noting that the Swiss franc is one of the few currencies that is up to now partially backed by gold. Therefore, if you trade the USD/CHF, you need to keep track of the gold movements. Increase in the price of gold entails rise of the Swiss currency.However, the key factors affecting the currency pair are the economic and political events in the United States. A binary options investor has to focus on them. At the same time, he should keep track of the events in Switzerland.

Along with the above mentioned factors, the currency pair is affected by the following events in Switzerland:

  1. Decisions on the key interest rates. The announcements are made quarterly. You need to mark this event in your economic calendar, if you want to make a profit on this instrument.
  2. The unemployment rate is released monthly. This negative factor rise entails the Swiss franc drop and bullish behavior of the pair.
  3. Commodity price index is updated monthly. The indicator increase is a negative sign.
  4. The officials of the Swiss National Bank regularly make announcements.
  5. The employment rate mirroring the situation with unemployment in the country is released quarterly. An increase in the number of employed makes the national currency rise, and an increase in the number of unemployed results in its drop.
  6. The political situation is of great importance. You can keep track of it watching and reading news reports.
  7. Finally, the price of the Swiss franc is affected by different disasters like accidents or natural disasters, military operations etc.

USD

  • Regarding the United States, the factors are almost the same as in the other currency pairs. Unlike Switzerland, natural disasters due to the geographical position happen more frequently there; hence to keep track of them is easier.
  • Besides, it’s easier to follow the political situation in the country as they are widely covered. 
  • The announcements on the key interest rates are made two times more, that is, eight times a year.
  • The Fed makes other announcements on the same dates.
  • The GDP figure is released monthly.
  • The U.S. Consumer Price Index is also updated monthly.
  • The unemployment rate which you can track based on the number of unemployment claims is of great importance for the U.S. currency. These data are released every Thursday.

How to Make a Profit on the USD/CHF

To make a profit trading binary options on the USD/CHF currency pair, you need to understand whether the price will rise or fall during the period you select.

I advise you to trade with 24option or AnyOption – one of the most amazing and reliable brokers I’ve ever dealt with. Besides, the broker offers Option+ . This feature enables a trader to close a binary option early.   

So, I analyze the USD/CHF currency pair, browse the broker’s website,  and select the USD/CHF as underlying asset. I set the expiry to 11:05 a.m. I choose the amount of my investment and click HIGH (UP) expecting the price to rise:

USDCHF

I’ve made a 73% profit as the price behaved in line with my forecast:

USDCHF

 

As you see, it’s not difficult to get a high return trading binary options on USD/CHF.

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