USD/CHF Bearishness Likely to Continue Amid Forecast of Increasing Swiss Trade Balance

USD/CHF – Technical Analysis for Australian Forex Trading & CFDs.

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Switzerland – Trade Balance

Tomorrow, at GMT 8:00 a.m., the Swiss Federal Statistical Office will release the monthly trade balance figure, which measures the difference in value between net import and export of goods over the past month.

Since the demand for export is directly correlated with the demand for the Swiss Franc, Forex investors analyze the monthly trade balance in order to gauge the strength of the CHF against other major currencies.

Last month, the Swiss trade balance figure came out at 2.72 billion and the forecast for this month is currently set at a much higher figure compared to last month, at 3.03 billion.

United States – Unemployment Claims

On Thursday, at GMT 2:30 p.m., the US Department of Labor will release the unemployment claims figure, which measures the changes in the number of people who claimed for unemployment insurance over the last week.

Forex traders consider the unemployment claims data to be one of the most important fundamental indicators of the US job market. This is primarily because unemployment and consumer spending has direct correlation and an increasing number of unemployment claims indicate lower consumer spending in the economy, which makes up the bulk of the economic activity in the United States.

Last week, the US unemployment claims figure came out at 239,00 and the forecast for this week is set at an increase to 242,000.

Trade Recommendation for the USD/CHF

USDCHF Analysis for Australian Forex - February 20th 2017

Since November 9, 2016, the USD/CHF price has remained very bullish and climbed up by around 500 pips. However, after reaching the resistance near 1.0325, the USD/CHF started a retracement and by the end of January 2017, it broke below the longstanding uptrend line.

As the US unemployment claims figure is expected to increase from 239,000 to 242,000 and the Swiss trade balance is expected to increase from 2.72 billion to 3.03 billion, the fundamental outlook for the USD/CHF would likely remain bearish this week.

Hence, if the USD/CHF price penetrates below last week’s support, which is at 0.9965, it would likely attract additional bearish momentum in the market.

Under the circumstances, it would be recommended that Forex traders consider placing a SELL order at market price for the USD/CHF with their Forex brokers, as soon as it is trading below the 0.9965 level. A possible profit target for this trade would be around the 0.9919 level. On the other hand, Australian Forex traders should consider placing a stop loss order above 0.9995.

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Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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