Forex Trading Using Intermarket Analysis

sWiTZerland
The Swiss National Bank (SNB) sets monetary and exchange rate 
policy. The SNB sets its targets for the Swiss franc based on annual 
inflation rates. However, the Swiss franc is unique among curren-
cies in that it is often considered a safe-haven investment in times of 
international turmoil and geopolitical tension. Forex traders may flock 
into the Swiss franc at the expense of other currencies as a way to ride 
temporarily through some international crisis, depending on traders’ 
views about the seriousness of the situation. 
The Swiss franc has historically enjoyed an advantageous role as a 
“safe” asset due to the SNB’s independence in preserving monetary 
stability, secrecy of the nation’s banking system, and the neutrality 
of Switzerland’s political position, whether the world is at war or at 
peace. In addition, the SNB is known to have large gold reserves that 
contribute to the franc’s solidity. Because of the proximity of the Swiss 
economy to the Eurozone (specifically Germany), the Swiss franc tends 
to be highly correlated with the euro, providing one of the most aligned 
currency pairs in the forex market.

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ForeX trading using interMarket anaLysis
HoW Can Traders keeP UP?
When you look back over the preceding list of fundamental factors—
the known and the unknown, the events and reports—you have to 
conclude that forex traders trading on the basis of fundamentals have 
an enormous amount of information to monitor and digest, especially 
if they are involved in more than one or two forex markets. There is a 
way that you can include all of these fundamentals in your trading by 
observing just one thing: price, which is covered in Chapter 4.

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4
Traders may find the long list of fundamentals that affect forex trading 
introduced in Chapter 3 somewhat daunting. That is why many traders 
tend to prefer technical analysis, a study of price action that can be 
applied to any market.
Technical analysis combines the influence of all the fundamentals 
affecting a market into one element, the current price. Rather than 
keeping up with all the fundamentals, traders can analyze price move-
ments on a chart, knowing that the price synthesizes every factor 
known to the market at the present time—at least, in the perception of 
traders. Price is the visible reflection of all underlying market forces, 
much like limbs and branches are the visible parts of a tree while fun-
damentals are the roots that feed and nourish the tree’s growth.
The information that forex traders really need for their technical analy-
sis boils down to the answers to the following four questions:
 
• In which direction is the market heading? 
• How strong will the move be? 
• When will the current trend lose its strength, creating a
top or a bottom?
• What will tomorrow’s high/low trading range be?