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Forex - USD/CHF weekly outlook: March 25 - 29

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Shutterstock photo - The dollar was sharply lower against the Swiss franc on Friday as hopes for a deal on an alternative bailout agreement for Cyprus boosted market sentiment, dampening dollar demand.

USD/CHF hit a session low of 0.9398, the pair's lowest since March 14, before settling at 0.9404, down 0.64% for the day and 0.74% lower for the week.

The pair is likely to find support at 0.9378, the low of March 14 and resistance at 0.9473, Friday's high.

Market sentiment was boosted as political leaders in Cyprus prepared to pass legislation to restructure the country's banking sector and impose capital controls.

The European Central Bank said Thursday that it will cut off liquidity to Cypriot banks on Monday if an agreement with the European Union and the International Monetary Fund on an alternative bailout solution is not in place.

The EU and the IMF have offered a EUR10 billion bailout loan to Cyprus, but insisted that the country find a way to raise EUR5.8 billion in exchange for financial aid.

A previous agreement that included a levy on deposits in Cypriot banks was rejected by the country's parliament on Tuesday.

The euro was little changed against the Swissy on Friday, with EUR/CHF rising to a session high of 1.2235, before settling at 1.2215, 0.04% higher for the day and down 0.48% for the week.

On Wednesday, the Federal Reserve announced that it will leave monetary policy unchanged in spite of recent signs that the U.S. recovery is gaining traction, citing concerns over high unemployment levels and risks from tax increases and federal government spending cuts.

Speaking at the end of the bank's two-day policy meeting, Fed Chairman Ben Bernanke said the central bank may gradually wind down the pace of its bond buying, but only after the labor market shows signs of being on a more stable footing.

In the week ahead investors will be closely monitoring developments in Cyprus as a failure to reach a deal could see the country exit the euro zone.

Market participants will also be watching German data on retail sales on Tuesday amid concerns over the economic outlook for the euro zone and an Italian government debt auction on Thursday.

The U.S. is to release a flurry of data including reports on durable goods orders, home sales and consumer confidence.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets.

Monday, March 25

Federal Reserve Chairman Ben Bernanke is to speak at an event in London; his comments will be closely watched for any indication of the possible future direction of monetary policy.

Tuesday, March 26

The U.S. is to release a flurry of economic data with government reports on durable goods orders and new home sales as well as a report on consumer confidence.

Wednesday, March 27

In Switzerland the KOF Economic Research Agency is to publish its economic barometer, designed to predict the medium term direction of the economy.

The U.S. is to produce industry data in pending home sales and a government report on crude oil stockpiles.

Thursday, March 28

The U.S. is to release the weekly government report on initial jobless claims and revised data on fourth quarter economic growth.

Friday, March 29

Markets in Switzerland are to remain closed in observance of Good Friday.

The U.S. is to round up the week with official data on personal spending and expenditure and revised data form the University of Michigan on consumer sentiment and inflation expectations. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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