GBPCHF Fundamental Analysis – June 17th 2019

Forex traders will get a light economic calendar to start the new trading week and many may await the US Fed announcement this Wednesday. While no change in interest rates is expected, the announcement could see some significant changes in the text in order to communicate an interest rate cut as the economy is struggling with the Trump administration’s trade war with China. Despite the ongoing trade war, which is likely to escalate further with no deal expected at this month’s G-20 summit in Japan, the Swiss Franc has rallied as its economy is performing better than expected and the currency is attracting safe haven bids. Forex broker recommendations are now cautioning that a pause in the advance should be expected and a short-period of profit taking may follow suit. The GBPCHF is grinding out a support level from where such a counter-trend move could be initiated. The Tory leadership race is adding volume to the British Pound with former Foreign Secretary and London Mayor Boris Johnson in the lead.

Here is the key factor to keep in mind today for British Pound trades:

• UK Rightmove House Prices: UK Rightmove House Prices for June increased by 0.3% monthly and were reported flat at 0.0% annualized. Forex traders can compare this to UK Rightmove House Prices for May which increased by 0.9% monthly and by 0.1% annualized.

While many economies are cooling down faster than economist’s expected and the global economy is headed into a recession, Chinese export surged in May while imports decreased which boosted its trade surplus. During the Asian trading session this morning, Singapore reported that non-oil exports for May increased more than anticipated, but posted an annualized slump. Singapore has called on the US to drop its trade war, accept China as a global superpower and to stop following a foreign policy which is destabilizing Asia. The added volatility in currency markets has created a new wave of attractive forex investment opportunities which should be considered.

Here is the key factor to keep in mind today for Swiss Franc trades:

• Swiss Total Sight Deposits and Swiss Domestic Sight Deposits: Swiss Total Sight Deposits for the week of June 14th are predicted at CHF577.5B and Swiss Domestic Sight Deposits are predicted at CHF468.2B. Forex traders can compare this to Swiss Total Sight Deposits for the week of June 7th which were reported at CHF578.1B and to Swiss Domestic Sight Deposits which were reported at CHF469.1B.

Should price action for the GBPCHF remain inside the or breakout above the 1.2540 to 1.2595 zone the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 1.2580
• Take Profit Zone: 1.2860 – 1.2935
• Stop Loss Level: 1.2480

Should price action for the GBPCHF breakdown below 1.2540 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 1.2515
• Take Profit Zone: 1.2380 – 1.2420
• Stop Loss Level: 1.2580

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