USD/CHF – Technical Analysis for Forex Trading & CFDs.
United States – Producer Price Index
On Thursday, at GMT 12:30 p.m., the US Department of Labor will release the Producer Price Index (PPI) figure, which measures the changes in the price of products and services bought by manufacturers and service providers in the country.
Since the higher cost of production is usually passed on to the consumers, a rise in the producer price index indicates future inflation. Hence, this data is vital for Forex trading as it is used by Forex investors as a leading indicator of the overall US economy.
Last month, the US month-over-month PPI increased by 0.2%, indicating inflationary pressure on the economy and the forecast for this month is set at an additional 0.4% increase.
Switzerland – Producer Price Index (PPI)
On Friday, at GMT 7:15 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 traders 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 0.3% and the forecast for this month is that it will increase by an additional 0.3% for the time being.
Since breaking above the uptrend line on September 20, the USD/CHF has climbed up by around 200 pips. However, as soon as the USD/CHF reached near the 0.9820 level, it found a strong resistance and formed a bearish pin bar last week.
As the US Producer Price Index is expected to increase by an additional 0.4%, but the Swiss Producer Price Index is expected to increase by only 0.3%, we believe it would likely set a bullish fundamental outlook for the USD/CHF this week. Therefore, if the USD/CHF closes above the resistance near 0.9820, it would likely attract additional bullish momentum in the market.
Hence, Australian Forex traders should look out for trading opportunities above this major resistance level around0.9820.