AUD/CHF – Technical Analysis for Forex Trading & CFDs.
Australia – National Australia Bank (NAB) Limited Business Confidence Index
On Tuesday, at GMT 12:30 a.m., the National Australia Bank (NAB) Limited will release its monthly business confidence index figure. This figure measures the level of a diffusion index based on a survey of 350 businesses in Australia.
The survey asks respondents to rate the current business environment in Australia. Since businesses are the first to react to changing business conditions, the level of their sentiment regarding optimism and business confidence, Forex traders consider it as a leading indicator of the overall economic health in the coming months.
Last month, the NAB business confidence index reading came out at 7, after coming at 5 in the previous month. If the trend continues, it would likely to have a bullish effect on the Australian Dollar.
Switzerland – Producer Price Index (PPI)
Later, at GMT 8:15 a.m., the Swiss Federal Statistical Office will release the month-over-month Producer Price Index (PPI), which measures the changes in the price of goods and raw materials bought by Swiss manufacturers during the previous month.
Forex investors consider the Swiss Producer Price Index (PPI) to be a leading indicator of the consumer inflation because any substantial increase in the raw materials is passed on to the buyers of the finished products by manufacturers. Hence, an increase in PPI indicates rising prices at the consumer level, which contributes to overall national inflation.
Last month, the Swiss PPI (m/m) increased by 0.5% and the forecast for this month is that will likely increase by 0.2%.
Since breaking above the downtrend line on July 7, the AUD/CHF initially climbed up by around 355 pips but soon found a strong resistance near the 0.7760 level. Since then, the pair remained range bound and traded sideways between 0.7570 and 0.7760 over the last few months. Last week, the AUD/CHF once again turned bearish and currently approaching the support around the 0.7570 level.
As the Australian NAB business confidence only increased by 2 points in the last two months, but the Swiss PPI is expected once again increase by 0.2%, we believe it would set a bearish fundamental outlook for the AUD/CHF this week. Therefore, if the AUD/CHF closes below the support near 0.7570, it would likely attract additional bearish momentum in the market.
Hence, Australian Forex traders should look out for trading opportunities below this major support level around 0.7570.