To maximize probability in the Forex markets, it is important to take into consideration the best hours to trade with a specific currency. In this article we will refer to the best periods to trade the Swiss Franc.
The Swiss Franc (CHF) is one of the top five currencies in respect of global liquidity, after the US dollar (USD), Euro (EUR), Japanese Yen (JPY) and British Pound Sterling (GBP). In fact, these are the pairs in which most traders focus their analysis. The most popular pairs among brokers are:
The Japanese yen – CHF/JPY
The British pound – GBP/CHF
The euro - EUR/CHF
The US dollar – USD/CHF
Between 2011 and January 2015, The Swiss National Bank (SNB) established a maximum limit for the EUR/CHF exchange rate at 1.20 to protect national currency from the considerable fluctuations that have been going on since the global economic crisis in 2008. In 2015, the Swiss Central Bank decided to eliminate this cap but did not announce it publicly, so this unexpected situation led to many traders and brokers suffering considerable losses.
Usually, the Swiss Franc (CHF) performance has biggest spreads for less popular pairs during less active timeframes, which represent the best profit opportunities. The market of Swiss franc is continuously open from Sunday evening to Friday afternoon in the United States. As most of the Forex instruments, every day the Swiss franc has great fluctuation in volume and volatility.
Among the most popular pairs for Swiss Franc that we already mentioned, the EUR/CHF and USD/CHF are the less sensitive. Therefore, many traders focus on them to identify reversals and trend consolidations by technical trading techniques. Some of these techniques are swing trading and channel trading, which can obtain very good profits.
What are the main factors that explain Swiss Franc performance?
In order to make successful trading on Swiss Franc, you have to know a few main Forex tips, which will be told below.
The Swiss National Bank meets every three months to revise monetary policies and the respective announcements are made at 3:30 am Eastern Time in United States. Since January 2015, this event is the main stimulus for the Swiss Franc (CHF) behavior and fluctuation. Any other circumstances that might affect correlated currencies, equities or bond markets also have to be considered.
The opening time of equity, options and futures exchanges markets are probably the best moments to trade the Swiss franc. Traders keep following economic news related to Europe, Switzerland or even United States. Given that Swiss franc is highly correlated to Euro and, EUR/USD is the pair most negotiated around the world, any event at America may produce changes in Euro and so in Swiss Franc.
Economic Disclosures
Between 2:00 a.m. and 5:00 a.m. ET in the United States is the disclosure of European and Swiss economic data. Usually, these announcements have an impact, at least, on three of the four more common crosses related to Swiss franc. So, from 30 to 60 minutes previous to these releases until one to three hours later, we can find the periods of time with more volume and volatility to trade Swiss franc. This timeframe lies over daytrading in the United States, which intensifies this market activity.
Another lapse of time of high transaction on Swiss franc occurs between 8:30 a.m. and 10:00 a.m; When the US economic data is announced. This moment represents a great opportunity to identify trending consolidation or reversal and to make great profits. Except for CHF/JPY, the effect of Japanese news is less considerable on the rest of the CHF pairs. This is because they are released between 4:30 p.m. and 10:00 p.m. Eastern Time in U.S., when there is sleeping time in Europe and Switzerland.
Swiss Franc And Equity Exchange Schedule
The trading activity related to Swiss franc rises while equity markets in Frankfurt and New York, and the futures and options markets in Chicago, are opening. So, the trading volume is higher between midnight and noon on the US East Coast. After lunchtime, usually the Forex trading transactions decreases strongly.
In spite of this previous situation, Central Banks adapt their schedules and have traders managing accurately the releases from: the Federal Reserve at 2:00 p.m. ET, the Bank of England at 7:00 a.m. ET and European Central Bank at 7:45 a.m. ET.
The Swiss franc develops in a very dynamic and liquid market with great profit opportunities, either in short or long term. This market also offers a wide trading schedule with the best moments to trade between 2:00 a.m. and 5:00 a.m. ET, and then between 8:30 a.m. and 10:00 a.m., when the release of economic news is completed.
