The latest series of economic data out of Switzerland disappointed and showed an economic slowdown which exceeded expectations. The Swiss National Bank is expected to keep interest rates at record lows for a longer time period and today’s CPI data is anticipated to show the absence on inflationary pressures. Yesterday’s Manufacturing PMI slide further into contractionary conditions which will hit the Swiss export sector. The CHFJPY started to correct, will this trend last? Today’s fundamental analysis will explore price action in both directions.
Japanese consumer confidence eroded further in September, highlighting the impact of the global economic slowdown as well as the Bank of Japan’s monetary policy. The Japanese Yen came under minor selling pressure following the announcement. A projectile from North Korea landed in Japan’s exclusive economic zone today which added to regional tensions ahead of planned low-level nuclear talks between the US and North Korea. Where will the CHFJPY head from here? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Here is the key factor to keep in mind today for Swiss Franc trades:
- Swiss CPI: The Swiss CPI for September is predicted to increase by 0.1% monthly and by 0.3% annualized. Forex traders can compare this to the Swiss CPI for August which was reported flat at 0.0% monthly and which increased by 0.3% annualized. The Swiss Core CPI for September is predicted to increase by 0.4% annualized. Forex traders can compare this this to the Swiss Core CPI for August which increased by 0.4% annualized. The Swiss EU Harmonized CPI for September is predicted to increase by 0.2% monthly and by 0.6% annualized. Forex traders can compare this to the Swiss EU Harmonized CPI for August which increased by 0.1% monthly and by 0.5% annualized.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Loans & Discounts: Japanese Loans & Discounts for August increased by 2.44% annualized. Forex traders can compare this to Japanese Loans & Discounts for July which increased by 2.40%.
- Japanese Monetary Base and Monetary Base end of Period: The Japanese Monetary Base for September increased by 3.0% annualized and the Monetary Base end of Period was reported at ¥520.4T. Economists predicted a figure of 3.1% and of ¥522.1T. Forex traders can compare this to the Japanese Monetary Base for August which increased by 2.8% annualized and to the Monetary Base end of Period which was reported at ¥515.9T.
- Japanese Consumer Confidence: Japanese Consumer Confidence for September was reported at 35.6. Economists predicted a figure of 38.2. Forex traders can compare this to Japanese Consumer Confidence for August which was reported at 37.1.
Should price action for the CHFJPY remain inside the or breakdown below the 108.100 to 108.700 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 108.550
- Take Profit Zone: 106.850 – 107.500
- Stop Loss Level: 108.950
Should price action for the CHFJPY breakout above 108.700 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 109.000
- Take Profit Zone: 110.000 – 110.800
- Stop Loss Level: 108.700
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