Forex traders are awaiting key US durable goods orders, and economists predict a recovery in December following November’s contraction. Housing data and consumer confidence are likely to move the US Dollar, while a regional manufacturing index may add volatility. The USDCHF is trapped in a bearish chart formation, but how will today’s economic data impact price action? Today’s fundamental analysis will take a look at price action in both directions.
Swiss trade data showed an unexpected plunge in exports, confirming the global economy remains fragile. The Swiss Franc is benefiting from the flight into risk-averse assets, as the new coronavirus is spreading in China and globally. Over 3,000 cases have been confirmed in over a dozen countries, and almost 100 deaths reported. Will bears keep the sell-off intact, or can bulls force a reversal? 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 Preliminary Durable Goods Orders: US Preliminary Durable Goods Orders for December are predicted to increase by 0.9% monthly and Durables Excluding Transportation are predicted to increase by 0.3% monthly. Forex traders can compare this to US Durable Goods Orders for November, which decreased by 2.1% monthly and to Durables Excluding Transportation, which decreased by 0.1% monthly. Capital Goods Orders Non-Defense Excluding Aircraft for December are predicted to increase by 0.1% monthly and Capital Goods Shipments Non-Defense Excluding Aircraft are predicted to increase by 0.2% monthly. Forex traders can compare this to Capital Goods Orders Non-Defense Excluding Aircraft for November, which increased by 0.2% monthly and to Capital Goods Shipments Non-Defense Excluding Aircraft, which decreased by 0.3% monthly.
- US S&P/Case-Shiller Composite 20: The US S&P/Case-Shiller Composite 20 for November is predicted to increase by 0.30% monthly and by 2.40% annualized. Forex traders can compare this to the US S&P/Case-Shiller Composite 20 for October, which increased by 0.43% monthly and by 2.23% annualized.
- US Consumer Confidence: US Consumer Confidence for January is predicted at 128.0. Forex traders can compare this to US Consumer Confidence for December, which was reported at 126.5.
- US Richmond Fed Manufacturing Index: The US Richmond Fed Manufacturing Index for January is predicted at -3. Forex traders can compare this to the US Richmond Fed Manufacturing Index for December, which was reported at -5.
Here is the key factor to keep in mind today for Swiss Franc trades:
- Swiss Trade Balance: The Swiss Trade Balance for December was reported at CHF1.964B. Forex traders can compare this to the Swiss Trade Balance for November, which was reported at CHF3.950B. Exports for December decreased by 3.4% monthly and Imports increased by 0.2% monthly. Forex traders can compare this to Exports for November, which decreased by 0.4% monthly and to Imports, which decreased by 0.1% monthly. Swiss Watch Exports for December increased by 5.8% annualized. Forex traders can compare this to Swiss Watch Exports for November, which decreased by 3.1% annualized.
Should price action for the USDCHF remain inside the or breakdown below the 0.9670 to 0.9730 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9680
- Take Profit Zone: 0.9425 – 0.9455
- Stop Loss Level: 0.9760
Should price action for the USDCHF breakout above 0.9730 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9760
- Take Profit Zone: 0.9840 – 0.9880
- Stop Loss Level: 0.9730
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