Yesterday’s upbeat CPI data across the Eurozone failed to lift the Euro as forex traders are focused on developments in the Middle East. The EURCHF remained stuck in its horizontal support area, awaiting more details. Today’s Eurozone CPI is expected to show tame inflationary pressures, an ongoing headache for the ECB. On the bright side, retail sales are anticipated to post a healthy increase. How will this impact price action in this currency pair? Today’s fundamental analysis will take a look at price action in both directions.
The Swiss Franc capitalized on the rise in tension after the US killed a key Iranian general in Iraq. Safe-haven demand pressured price action into a strong support area. CPID data out of Switzerland is likely to show deflationary pressures despite the SNB’s ultra-loose monetary policy and lowest interest rates in the financial market. Will it force the EURCHF into a breakdown or can price action reverse? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for Euro trades:
- Italian CPI: The Preliminary Italian CPI for December is predicted to increase by 0.2% monthly and by 0.6% annualized. Forex traders can compare this to the Italian CPI for November, which decreased by 0.2% monthly, and which increased by 0.2% annualized. The Preliminary Italian Harmonized CPI for December is predicted to increase by 0.2% monthly and by 0.5% annualized. Forex traders can compare this to the Italian Harmonized CPI for November, which decreased by 0.3% monthly and which increased by 0.2% annualized.
- Eurozone CPI and Eurozone Core CPI: The Eurozone CPI for December is predicted to increase by 0.3% monthly and by 1.3% annualized. Forex traders can compare this to the Eurozone CPI for November, which decreased by 0.3% monthly and which increased by 1.0% annualized. The Eurozone Core CPI for December is predicted to increase by 1.3% annualized. Forex traders can compare this to the Eurozone Core CPI for November, which increased by 1.3% annualized.
- Eurozone Retail Sales: Eurozone Retail Sales for November are predicted to increase by 0.6% monthly and by 1.5% annualized. Forex traders can compare this to Eurozone Retail Sales for October, which decreased by 0.6% monthly and which increased by 1.4% annualized.
Here is the key factor to keep in mind today for Swiss Franc trades:
- Swiss CPI: The Swiss CPI for December is predicted to decrease by 0.1% monthly and flat at 0.0% annualized. Forex traders can compare this to the Swiss CPI for November, which decreased by 0.1% monthly and 0.1% annualized. The Swiss Core CPI for December is predicted to increase by 0.4% annualized. Forex traders can compare this to the Swiss Core CPI for November, which increased by 0.4% annualized. The Swiss EU Harmonized CPI for December is predicted to decrease by 0.4% monthly and 0.2% annualized. Forex traders can compare this to the Swiss EU Harmonized CPI for November, which decreased by 0.4% monthly and 0.3% annualized.
Should price action for the EURCHF remain inside the or breakdown below the 1.0800 to 1.0860 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.0840
- Take Profit Zone: 1.0570 – 1.0630
- Stop Loss Level: 1.0900
Should price action for the EURCHF breakout above 1.0860 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.0900
- Take Profit Zone: 1.0990 – 1.1030
- Stop Loss Level: 1.0860
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