Source: PaxForex Premium Analytics Portal, Fundamental Insight
The German Trade Balance for May is predicted at €2.7B. Forex traders can compare this to German Trade Balance for April, reported at €3.5B. Exports for May are predicted to increase by 0.9% monthly and Imports by 0.9% monthly. Forex traders can compare this to Exports for April, which rose 4.4% monthly, and Imports which expanded 3.1% monthly.
The Swiss CPI for June is predicted to increase 0.3% monthly and 3.2% annualized. Forex traders can compare this to the Swiss CPI for May, which rose 0.7% monthly and 2.9% annualized.
Eurozone Sentix Investor Confidence for July is predicted at -19.9. Forex traders can compare this to Eurozone Sentix Investor Confidence for June, reported at -15.8.
The Eurozone PPI for May is predicted to increase 1.0% monthly and 36.7% annualized. Forex traders can compare this to the Eurozone PPI for April, which rose 1.2% monthly and 37.2% annualized.
While financial markets finished the first trading session of July in the green, traders should remain cautious as more selling lies ahead. Everything from equity markets to cryptocurrencies has more downside potential to shake sky-high valuations. Inflation, rising borrowing costs, and a slowing economy will remain the prevailing trends for the second half of 2022. Central banks will add their policy mistakes to worsen the scenario, with the US Federal Reserve having lost the little credibility it had. Today’s trading session could be calmer, especially after the European trading session, where traders get more inflation data on top of German export figures, as the US remains closed for a holiday. Traders should follow price action closely and keep their risk management aligned with volatile markets and a bearish bias.
The forecast for the EUR/CHF turned bullish after this currency pair corrected into its horizontal support area, which includes parity, adding a psychological support level. Confirming the lack of short-term bearishness is the flat Kijun-sen, but volatility remains elevated as the Tenkan-sen moves lower. The Ichimoku Kinko Hyo Cloud shows signs of a potential drift lower, presenting a downward shifting resistance level, with the descending Senkou Span A moving in on the flat Senkou Span B. Traders should monitor the CCI after forming a positive divergence in extreme oversold territory, followed by a breakout above -100. A move above zero could trigger more buying. Can bulls overpower bears and push the EUR/CHF into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the EUR/CHF remain inside the or breakout above the 0.9945 to 1.0065 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.0000
- Take Profit Zone: 1.0240 – 1.0300
- Stop Loss Level: 1.9900
Should price action for the EUR/CHF breakdown below 0.9945, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9900
- Take Profit Zone: 0.9775 – 0.9825
- Stop Loss Level: 0.9945
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