Forex traders will get key economic data out of the US in thin trading ahead of the New Year’s break, with many traders on extended holidays. The Chicago PMI is expected to confirm an ongoing contraction, supported by the Dallas Fed Manufacturing Activity Index. Economists do expect a rebound in pending home sales. The USDCHF is in a holding pattern inside of its horizontal support area. How will price action be impacted following the release of economic data? Today’s fundamental analysis will take a look at price action in both directions.
Swiss KOF Leading Indicator for December surprised to the upside but failed to inspire Swiss Franc bulls to add to the sell-off in the USDCHF. Many traders will wait until next week before committing to new positions. As a risk-off period may accompany the full return of traders, the Swiss Franc is anticipated to benefit. What impact will US data have on this currency pair later in today’s session? 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 US Dollar trades:
- US Advanced Goods Trade Balance: The US Advanced Goods Trade Balance for November is predicted at -$68.8B. Forex traders can compare this to the US Advanced Goods Trade Balance for October, which was reported at -$66.5B.
- US Inventories: US Preliminary Wholesale Inventories for November are predicted to increase by 0.2% monthly and US Preliminary Retail Inventories are predicted to increase by 0.1% monthly. Forex traders can compare this to US Wholesale Inventories for October, which increased by 0.1% monthly and to US Retail Inventories, which increased by 0.3% monthly.
- US Chicago PMI: The US Chicago PMI for December is predicted at 48.0. Forex traders can compare this to the US Chicago PMI for November, which was reported at 46.3.
- US Pending Home Sales: US Pending Home Sales for November are predicted to increase by 1.3% monthly and by 7.4% annualized. Forex traders can compare this to US Pending Home Sales for October, which decreased by 1.7% monthly and which increased by 3.9% annualized.
- US Dallas Fed Manufacturing Activity Index: The US Dallas Fed Manufacturing Activity Index for December is predicted at 0.0. Forex traders can compare this to the US Dallas Fed Manufacturing Activity Index for November, which was reported at -1.3.
Here is the key factor to keep in mind today for Swiss Franc trades:
- Swiss KOF Leading Indicator: The Swiss KOF Leading Indicator for December was reported at 96.4. Economists predicted a figure of 94.5. Forex traders can compare this to the Swiss KOF Leading Indicator for November, which was reported at 92.6.
Should price action for the USDCHF remain inside the or breakdown below the 0.9700 to 0.9760 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9730
- Take Profit Zone: 0.9500 – 0.9540
- Stop Loss Level: 0.9775
Should price action for the USDCHF breakout above 0.9760 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9775
- Take Profit Zone: 0.9840 – 0.9880
- Stop Loss Level: 0.9730
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