Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Swiss Trade Balance for August came in at CHF4.054B. Economists predicted a figure of CHF4.230B. Forex traders can compare this to the Swiss Trade Balance for September, reported at CHF3.132B.
The Eurozone Current Account (s.a) for July is predicted at €30.2B. Forex traders can compare this to the Eurozone Current Account (s.a.) for June, reported at €35.8B.
The Eurozone CPI for August is predicted to increase by 0.6% monthly and 5.3% annualized. Forex traders can compare this to the Eurozone CPI for July, which decreased by 0.1% monthly and expanded by 5.3% annualized. The Eurozone Core CPI for August is predicted to rise by 0.3% monthly and 5.3% annualized. Forex traders can compare this to the Eurozone Core CPI for July, which contracted by 0.1% monthly and rose by 5.5% annualized. The Eurozone Harmonized Core CPI for August is predicted to rise 0.3% monthly and 6.2% annualized. Forex traders can compare this to the Eurozone Harmonized Core CPI for July, which was flat at 0.0% monthly and increased by 6.6% annualized.
The European Central Bank hinted at the end of its interest rate increases, allowing past actions to filter through the economy, which continues to decelerate. Germany, the EU’s largest economy, once again leads the downtrend in a move not seen since the post-reunification period in the 90’s. Today’s CPI data is expected to show sticky inflation across the board, and with oil prices rising and the winter heating season slowly approaching, the ECB will struggle to balance inflation and a slowing economy. While the path of least resistance for the EUR/CHF is down, traders should tread cautiously amid the risk of interference by the Swiss National Bank.
The forecast for the EUR/CHF remains cautiously bearish as this currency pair faces a major resistance area enforced by its downward shifting Ichimoku Kinko Hyo Cloud. Volatility could rise as the descending Kijun-sen moves below the flat Tenkan-sen, which creates a false bullish crossover, and a reversal may reignite selling pressure. Traders should also monitor the CCI after reaching extreme overbought territory with limited upside. A lower high could precede a breakdown below 100, and this technical indicator may quickly drop below zero, adding a bearish catalyst. Can bears retake control over the EUR/CHF and pressure price action into its horizontal support area and a fresh multi-year low? 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 breakdown below the 0.9560 to 0.9600 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9585
- Take Profit Zone: 0.9375 – 0.9420
- Stop Loss Level: 0.9640
Should price action for the EUR/CHF breakout above 0.9600, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9640
- Take Profit Zone: 0.9685 – 0.9725
- Stop Loss Level: 0.9600
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
