All eyes will be on the NFP report out of the US, where economists predict less than 100K job additions and over 50K job losses on the manufacturing sector. The labor force participation rate is also called lower while the unemployment rate is expected to rise. The ISM Manufacturing report will also expected to move the US Dollar and anticipated to show its second consecutive month in contractionary territory. How will the USDCHF react after the release of today’s economic data? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Forex traders will get Swiss CPI data today which is expected to show the lack of inflation. The Swiss Franc is likely to remain on track to strengthen further due to the capital inflow from risk averse investors. The global economy is slowing down further as evident in this week’s economic reports and forex traders are now focused on the October NFP report out of the US. How will this impact price action in the USDCHF? Today’s fundamental analysis will take a look at the upside potential as well as downside risk in this currency pair.
Here are the key factors to keep in mind today for US Dollar trades:
- US NFP Report: The US NFP Report for October is predicted to show 88K job additions and an unemployment rate of 3.6%. Forex traders can compare this to the US NFP Report for September which showed 136K job additions and an unemployment rate of 3.5%. Private Payrolls for October are predicted to show 85K job additions and Manufacturing Payrolls 53K job losses. Forex traders can compare this to Private Payrolls for September which showed 114K job additions and Manufacturing Payrolls which showed 2K job losses. The Average Work Week for October is predicted at 34.4 hours. Forex traders can compare this to the Average Work Week for September which was reported at 34.4 hours. Average Hourly Earnings for October are predicted to increase by 0.3% monthly and by 3.0% annualized. Forex traders can compare this to Average Hourly Earnings for September were reported flat at 0.0% monthly and which increased by 2.9% annualized. The Labor Force Participation Rate for October is predicted at 63.1%. Forex traders can compare this to the Labor Force Participation Rate for September which was reported at 63.2%.
- US Markit Manufacturing PMI: The Final US Markit Manufacturing PMI for October is predicted at 51.5. Forex traders can compare this to the previous US Markit Manufacturing PMI for October which was reported at 51.5.
- US ISM Manufacturing Index: The US ISM Manufacturing Index for October is predicted at 49.0. Forex traders can compare this to the US ISM Manufacturing Index for September which was reported at 47.8. ISM Prices Paid for October are predicted at 50.0. Forex traders can compare this to ISM Prices Paid for September which were reported at 49.7. ISM Employment for October is predicted at 46.4. Forex traders can compare this to ISM Employment for September which was reported at 46.3. ISM New Orders for October are predicted at 47.8. Forex traders can compare this to ISM New Orders for September which were reported at 47.3.
- US Construction Spending: US Construction Spending for September is predicted to increase by 0.2% monthly. Forex traders can compare this to US Construction Spending for August which increased by 0.1% monthly.
Here are the key factors to keep in mind today for Swiss Franc trades:
- Swiss CPI: The Swiss CPI for October is predicted flat at 0.0% monthly and flat at 0.0% annualized. Forex traders can compare this to the Swiss CPI for September which decreased by 0.1% monthly and which increased by 0.1% annualized. The Swiss Core CPI for October is predicted to increase by 0.4% annualized. Forex traders can compare this this to the Swiss Core CPI for September which increased by 0.4% annualized. The Swiss EU Harmonized CPI for October is predicted flat at 0.0% monthly and to increase by 0.1% annualized. Forex traders can compare this to the Swiss EU Harmonized CPI for September which decreased by 0.4% monthly and which increased by 0.1% annualized.
- Swiss Manufacturing PMI: The Swiss Manufacturing PMI for October is predicted at 45.3. Forex traders can compare this to the Swiss Manufacturing PMI for September which was reported at 44.6.
Should price action for the USDCHF remain inside the or breakdown below the 0.9840 to 0.9890 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9860
- Take Profit Zone: 0.9660 – 0.9715
- Stop Loss Level: 0.9925
Should price action for the USDCHF breakout above 0.9890 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9925
- Take Profit Zone: 1.0025 – 1.0100
- Stop Loss Level: 0.9890
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