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Forex: USD/CHF pulls back to 0.9400 on German data

FXstreet.com (Barcelona) - The USD/CHF climbed the chart after disappointing industrial output data in France, but mostly due to Swiss Franc weakness alone, reaching as high as 0.9436. However, the market took profits following the growing factory orders seen in Germany, by 2.2% in March, surprising investors that were expecting a -0.5% drop.

Details showed broad-based gains from the domestic side (+1.8%), as well as exports (ex-Germany EZ orders +4.2% and non-EZ orders +1.9%). The USD/CHF moved back to the 0.9400 handle that was finally breached today after several attempts since earlier in the month.

The French industrial output not only contracted as predicted, but fell by -0.9% instead of the market consensus of -0.3%. The French trade deficit narrowed from €-6.011B to €-4.696B, beating €-5.600B consensus, as exports grew from €35.703B to €36.204B while imports dropped from €41.348B to €40.9B.

European Commissioner Olli Rehn said that tackling funding problems in Europe is the next challenge and IMF’s Lagarde said that central bankers must find out why banks are not lending.

“The USD/CHF currency pair continues forming an ascending correction. According to the main scenario, the price may continue falling down to reach the target at 0.9200”, wrote Roboforex.com analyst Igor Sayadov, pointing to an alternative scenario in which the pair may continue growing up towards the level of 0.9450 and then move downwards to reach the level of 0.9295, thus forming a consolidation triangle.

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