USDCHF Fundamental Analysis – June 20th 2019

As the Fed paved the way for monetary easing, how will the US Dollar be traded between now and July’s FOMC meeting? Bond yields plunged and global equities rallied. Regional US economic reports have showed an economy slowing much faster than expected which will make them even more important moving forward. Forex traders will also pay close attention to today’s US Leading Indicators Index which is anticipated to ease further. FX trading volume has picked up on bearish US Dollar trades which is likely to accelerate as portfolios will be adjusted to the pending change in US monetary policy. How weak is the underlying US economy and how much downside potential is there in the USDCHF?

Here are the key factors to keep in mind today for US Dollar trades:

• US Current Account Balance: The US Current Account Balance for the first-quarter is predicted at -$125.0B. Forex traders can compare this to the US Current Account Balance for the fourth-quarter which was reported at -$134.4B.
• US Initial Jobless Claims and Continuing Claims: US Initial Jobless Claims for the week of June 15th are predicted at 220K and US Continuing Claims for the week of June 8th are predicted at 1,680K. Forex traders can compare this to US Initial Jobless Claims for the week of June 8th which were reported at 222K and to US Continuing Claims for the week of June 1st which were reported at 1,695K.
• US Philadelphia Fed Business Outlook: The Philadelphia Fed Business Outlook for June is predicted at 10.4. Forex traders can compare this to the Philadelphia Fed Business Outlook for May which was reported at 16.6.
• US Leading Indicators: US Leading Indicators for May are predicted to increase by 0.1% monthly. Forex traders can compare this to US Leading Indicators for April which increased by 0.2% monthly.

One of the rare bright spots in the global economy is Switzerland. The latest Sentix Investor Confidence report singled out the Swiss economy as the only one where indicators are pointing up, but today’s trade data showed a mixed picture. The trade balance for May increased above expectations despite a stronger Swiss Franc, but exports decreased much steeper as imports rose at a much smaller pace. This is the latest sign that the overall global economy is heading towards a recession. The Swiss Franc has attracted plenty of save haven bids, can the sell-off in the USDCHF continue? Make sure that your forex investment strategy is aligned with the shifts in the forex market in order to remain profitable, allow our expert analysts to guide you through turbulent times.

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

• Swiss Trade Balance: The Swiss Trade Balance for May was reported at CHF3.410B. Economists predicted a figure of CHF2.870B. Forex traders can compare this to the Swiss Trade Balance for April which was reported at CHF2.294B. Exports for May decreased by 1.2% monthly and Imports increased by 0.7% monthly. Forex traders can compare this to Exports for April which decreased by 0.6% monthly and to Imports which increased by 1.5% monthly.

Should price action for the USDCHF remain inside the or breakdown below the 0.9860 to 0.9915 zone the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 0.9890
• Take Profit Zone: 0.9715 – 0.9790
• Stop Loss Level: 0.9960

Should price action for the USDCHF breakout above 0.9915 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 0.9965
• Take Profit Zone: 1.0080 – 1.0100
• Stop Loss Level: 0.9915

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