The BRC Shop Price Index decreased in December, suggesting a weak consumer during the holiday shopping season. Forex traders will get housing data as well as the Markit/CIPS Construction PMI later in today’s trading sessions. The GBPCHF was able to advance after reaching its horizontal support area, but bullish momentum is weak. How will this currency pair react to today’s economic data out of the UK? Today’s fundamental analysis will take a look at price action in both directions.
The Swiss economy has shown signs of weaker growth, after spending most of 2019 outperforming its competitors. The risk-on sentiment has resulted in capital outflows from the Swiss Franc, but the GBPCHF stabilized and is now awaiting the next event that will move price action. Today’s manufacturing PMI is expected to confirm the ongoing contraction. How will this impact price action in this currency pair? 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 British Pound trades:
- UK BRC Shop Price Index: The UK BRC Shop Price Index for December decreased by 0.4% annualized. Economists predicted a decrease of 0.5%. Forex traders can compare this to the UK BRC Shop Price Index for November, which decreased by 0.5% annualized.
- UK Nationwide House Prices: UK Nationwide House Prices for December are predicted flat at 0.0% monthly and to increase by 1.4% annualized. Forex traders can compare this to UK Nationwide House Prices for November, which increased by 0.5% monthly and by 0.8% annualized.
- UK Markit/CIPS Construction PMI: The UK Markit/CIPS Construction PMI for December is predicted at 45.8. Forex traders can compare this to the UK Markit/CIPS Construction PMI for November, which was reported at 45.3.
- UK Mortgage Approvals: UK Mortgage Approvals for November are predicted at 64.4K. Forex traders can compare this to UK Mortgage Approvals for October, which were reported at 64.6K.
- UK Consumer Credit and Net Lending Securities on Dwellings: UK Net Consumer Credit for November is predicted at £1.0B and Net Lending Securities on Dwellings is predicted at £4.0B. Forex traders can compare this to UK Net Consumer Credit for October, which was reported at £1.3B and to Net Lending Securities on Dwellings, which was reported at £4.3B.
Here is the key factor to keep in mind today for Swiss Franc trades:
- Swiss Manufacturing PMI: The Swiss Manufacturing PMI for December is predicted at 48.8. Forex traders can compare this to the Swiss Manufacturing PMI for November, which was reported at 48.8.
Should price action for the GBPCHF remain inside the or breakout above the 1.2685 to 1.2800 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.2735
- Take Profit Zone: 1.3100 – 1.3200
- Stop Loss Level: 1.2660
Should price action for the GBPCHF breakdown below 1.2685 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.2660
- Take Profit Zone: 1.2475 – 1.2565
- Stop Loss Level: 1.2735
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