Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Swiss KOF Leading Indicator for September is predicted at 93.2. Forex traders can compare this to the Swiss KOF Leading Indicator for August, reported at 93.8.
US Personal Income for September is predicted to increase by 0.3% monthly and Personal Spending by 0.4% monthly. Forex traders can compare this to Personal Income for August, which rose 0.3% monthly, and to Personal Spending, which increased 0.4% monthly. The PCE Core Deflator for September is predicted to increase by 0.5% monthly and 5.2% annualized. Forex traders can compare this to the PCE Core Deflator for August, which rose 0.6% monthly and 4.9% annualized.
The US Employment Cost Index for the third quarter is predicted to increase by 1.2% quarterly. Forex traders can compare this to the US Employment Cost Index for the second quarter, which increased by 1.3% quarterly.
US Pending Home Sales for September are predicted to plunge 5.0% monthly. Forex traders can compare this to US Pending Home Sales for August, which dropped 2.0% monthly.
The final US Michigan Consumer Sentiment for October is predicted at 59.8. Forex traders can compare this to US Michigan Consumer Confidence for September, reported at 58.6. The Final Current Conditions for October are predicted at 65.3. Forex traders can compare this to Current Conditions for September, reported at 59.7.
Despite the marginally better-than-expected third-quarter US GDP reading announced yesterday, which included a drop in the GDP Price Index, other economic data suggests a weak start to the fourth quarter. The bear market remains intact, borrowing costs will continue to increase, and central banks are draining liquidity. Financial markets expect the US Federal Reserve to hike interest rates by 75 basis points before slowing their pace, taking away the only bullish catalyst from the US Dollar. Traders should prepare for increasing downside pressure on the greenback.
The forecast for the USD/CHF remains cautiously bearish after this currency pair collapsed below parity. Volatility could rise with the Kijun-sen ascending and approaching its flat Tenkan-sen. The Ichimoku Kinko Hyo Cloud has entered a sideways trend and may attract price action. Traders must monitor the CCI in extreme oversold territory. A breakout could add to short-term volatility, but this technical indicator could remain below zero and reverse to fresh multi-week lows. Can bears maintain their grip on price action and force the USD/CHF into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the USD/CHF remain inside the or breakdown below the 0.9840 to 0.9940 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9895
- Take Profit Zone: 0.9625 – 0.9710
- Stop Loss Level: 0.9995
Should price action for the USD/CHF breakout above 0.9940, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9995
- Take Profit Zone: 1.0075 – 1.9870
- Stop Loss Level: 0.9940
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