The Swiss unemployment rate decreased in January, but inflationary pressures remain absent. The Swiss National Bank increased its activity in the forex market slightly and continues to monitor the impact of the coronavirus on the global economy. The CHFJPY completed a breakdown below a strong horizontal support area, where will price action move from here? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Forex traders received more disappointing economic news with the disappointing Japanese Eco Watchers Survey outlook. The Japanese trade surplus came in stronger than expected, but forex traders are looking forward to January’s data to gauge the impact of the coronavirus. Will bears pressure for more downside in the CHFJPY, or can bulls step in and reverse the breakdown? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.
Here are the key factors to keep in mind today for Swiss Franc trades:
- Swiss Unemployment Rate: The Swiss Unemployment Rate for January was reported at 2.3%, and the Seasonally Adjusted Unemployment Rate was reported at 2.6%. Economists predicted a rate of 2.6% and 2.3%. Forex traders can compare this to the Swiss Unemployment Rate for December, which was reported at 2.5% and to the Seasonally Adjusted Unemployment Rate, which was reported at 2.3%.
- Swiss CPI: The Swiss CPI for January decreased by 0.2% monthly and increased by 0.2% annualized. Economists predicted a decrease of 0.2% monthly and an increase of 0.2% annualized. Forex traders can compare this to the Swiss CPI for December, which was reported flat at 0.0% monthly, and which increased by 0.2% annualized. The Swiss Core CPI for January increased by 0.2% annualized. Economists predicted an increase of 0.4%. Forex traders can compare this to the Swiss Core CPI for December, which increased by 0.4% annualized. The Swiss EU Harmonized CPI for January decreased by 0.4% monthly and increased by 0.2% annualized. Economists predicted a decrease of 0.1% and an increase of 0.1%. Forex traders can compare this to the Swiss EU Harmonized CPI for December, which increased by 0.2% monthly, and which decreased by 0.1% annualized.
- Swiss Total Sight Deposits and Swiss Domestic Sight Deposits: Swiss Total Sight Deposits for the week of February 7th were reported at CHF589.6B and Swiss Domestic Sight Deposits were reported at CHF503.0B. Forex traders can compare this to Swiss Total Sight Deposits for the week of January 31st, which were reported at CHF588.7B and to Swiss Domestic Sight Deposits, which were reported at CHF503.7B.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Bank Lending: Japanese Bank Lending including Trusts for January increased by 1.9% annualized and Japanese Bank Lending excluding Trusts increased by 2.0% annualized. Forex traders can compare this to Japanese Bank Lending including Trusts for December, which increased by 1.8% annualized and to Japanese Bank Lending excluding Trusts, which increased by 1.9% annualized.
- Japanese Housing Loans: Japanese Housing Loans for the fourth-quarter increased by 2.8% annualized. Forex traders can compare this to Japanese Housing Loans for the third quarter, which increased by 2.9% annualized.
- Japanese Current Account Balance and Trade Balance: The Preliminary Japanese Current Account Balance for December was reported at ¥524.0B. Economists predicted a figure of ¥464.7B. Forex traders can compare this to the Japanese Current Account Balance for November, which was reported at ¥1,436.8B. The Preliminary Japanese Adjusted Current Account Balance for December was reported at ¥1,714.7B. Economists predicted a figure of ¥1,677.2B. Forex traders can compare this to the Japanese Adjusted Current Account Balance for November, which was reported at ¥1,794.9B. The Preliminary Japanese Trade Balance for December was reported at ¥120.7B. Economists predicted a figure of ¥28.0B. Forex traders can compare this to the Japanese Trade Balance for November, which was reported at -¥2.5B.
- Japanese Bankruptcies: Japanese Bankruptcies for January increased by 16.06% annualized. Forex traders can compare this to Japanese Bankruptcies for December, which increased by 13.18% annualized.
- Japanese Eco Watchers Survey: The Japanese Eco Watchers Survey Current Index for January was reported at 41.9 and the Japanese Eco Watchers Survey Outlook Index was reported at 41.8. Economists predicted a figure of 39.1 and 43.8. Forex traders can compare this to the Japanese Eco Watchers Survey Current Index for December, which was reported at 39.7 and to the Japanese Eco Watchers Survey Outlook Index, which was reported at 45.5.
Should price action for the CHFJPY remain inside the or breakdown below the 112.000 to 112.700 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 112.250
- Take Profit Zone: 109.500 – 110.150
- Stop Loss Level: 113.150
Should price action for the CHFJPY breakout above 112.700 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 113.150
- Take Profit Zone: 114.000 – 114.400
- Stop Loss Level: 112.700
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