This week was heavy on economic data across the globe and forex traders will get to finish on a high note with the release of the NFP report out of the US. Economists predict a slowdown in hiring, but still an overall solid report. US President Trump announced that he will impose 10% tariffs on $300 billion worth of Chinese imports starting September 1st, which means that the US would essentially tariff all imports. Will forex traders dump the USDCHF as they seek more safe havens? Today’s fundamental analysis will take a look at the downside potential as well as upside risk.
Here are the key factors to keep in mind today for US Dollar trades:
- US NFP Report: The US NFP Report for July is predicted to show 164K job additions and an unemployment rate of 3.7%. Forex traders can compare this to the US NFP Report for June which showed 224K job additions and an unemployment rate of 3.7%. Private Payrolls for July are predicted to show 160K job additions and Manufacturing Payrolls 5K job additions. Forex traders can compare this to Private Payrolls for June which showed 191K job additions and Manufacturing Payrolls which showed 17K job additions. The Average Work Week for July is predicted at 34.4 hours. Forex traders can compare this to the Average Work Week for June which was reported at 34.4 hours. Average Hourly Earnings for July are predicted to increase by 0.2% monthly and by 3.1% annualized. Forex traders can compare this to Average Hourly Earnings for June which increased by 0.2% monthly and by 3.1% annualized. The Labor Force Participation Rate for July is predicted at 62.9%. Forex traders can compare this to the Labor Force Participation Rate for June which was reported at 62.9%.
- US Trade Balance: The US Trade Balance for June is predicted at -$54.6B. Forex traders can compare this to the US Trade Balance for May which was reported at -$55.5B.
- US Factory Orders: US Factory Orders for June are predicted to increase by 0.8% monthly. Forex traders can compare this to US Factory Orders for May which decreased by 0.7% monthly.
- US Michigan Consumer Sentiment: Final US Michigan Consumer Sentiment for July is predicted at 90.3. Forex traders can compare this to previous US Michigan Consumer Confidence for July which was reported at 90.1. Final Current Conditions for July are predicted at 111.6 and Final Expectations are predicted at 98.5. Forex traders can compare this to previous Current Conditions for July which were reported at 111.1 and to Expectations which were reported at 98.4.
After a sell-off in the Swiss Franc, inspired by profit taking, will forex traders once again seek safe haven assets as the global economy takes the next step down? US President Trump has just intensified his trade war with China as he announced new tariffs and forex traders are now awaiting China’s response. Swiss inflation data showed a further slowdown and the SVME Manufacturing PMI extended its contraction. Is this the time to short the USDCHF as geopolitical turmoil trumps a domestic slowdown? Follow the PaxForex Daily Fundamental Analysis and earn more pips per trade at PaxForex!
Here are the key factors to keep in mind today for Swiss Franc trades:
- Swiss CPI: The Swiss CPI for July decreased by 0.5% monthly and increased by 0.3% annualized. Economists predicted a decrease of 0.4% monthly and an increase of 0.5% annualized. Forex traders can compare this to the Swiss CPI for June which was reported flat at 0.0% monthly and which increased by 0.6% annualized. The Swiss Core CPI for July increased by 0.4% annualized. Economists predicted an increase of 0.6%. Forex traders can compare this this to the Swiss Core CPI for June which increased by 0.7% annualized. The Swiss EU Harmonized CPI for July was reported flat at 0.0% monthly and increased by 0.4% annualized. Economists predicted a flat reading of 0.0% and an increase of 0.5%. Forex traders can compare this to the Swiss EU Harmonized CPI for June which increased by 0.2% monthly and by 0.7% annualized.
- Swiss SVME Manufacturing PMI: The Swiss SVME Manufacturing PMI for July was reported at 44.7. Economists predicted a figure of 46.5. Forex traders can compare this to the Swiss SVME Manufacturing PMI for June which was reported at 47.7.
Should price action for the USDCHF remain inside the or breakdown below the 0.9840 to 0.9900 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9875
- Take Profit Zone: 0.9540 – 0.9620
- Stop Loss Level: 0.9920
Should price action for the USDCHF breakout above 0.9900 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9920
- Take Profit Zone: 1.0015 – 1.0080
- Stop Loss Level: 0.9870
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