Forex Market: USD/CHF daily forecast

During yesterday’s trading session USD/CHF traded within the range of 0.9037-0.9074 and closed at 0.9069.

At 6:30 GMT today USD/CHF was adding 0.02% for the day to trade at 0.9072. The pair touched a daily high at 0.9074 at 6:15 GMT, the pairs strongest since February 3rd.

Fundamental view

United States

Employers in the US non-farm private sector probably added 225 000 new jobs during July, according to the median estimate by experts, following 281 000 new positions added in June. The employment report by Automated Data Processing Inc. (ADP) is based on data that encompasses 400 000 – 500 000 companies employing over 24 million people, working in the 19 major sectors of the economy. The ADP employment change indicator is calculated in accordance with the same methodology, which the Bureau of Labor Statistics (BLS) uses. Published two days ahead of government’s employment statistics, this report is used by traders as a reliable predictor of the official non-farm payrolls data. Creation of jobs is considered of utmost importance for consumer spending, while the latter is a major driving force behind economic growth. In case expectations were exceeded, this would bolster demand for the dollar. The official figure is scheduled to be published at 12:15 GMT.

In addition, United States’ advance (flash) annualized Gross Domestic Product probably widened 2.9% during the second quarter of 2014, offsetting a 2.9% contraction in the first quarter.

This is the widest indicator for nation’s economic activity. A larger than expected increase in theGDP figure would boost demand for the US dollar. The official result is to be released at 12:30 GMT.

At the same time, the Federal Open Market Committee (FOMC) will probably keep its benchmark interest rate unchanged at a record-low 0.25% for a 44th consecutive meeting. In addition, the FOMC members will probably reduce the pace of monthly asset purchases by another $10 billion to $25 billion, according to the median estimate by experts.

Investors and traders keep a close eye on the FOMC’s rate decisions. After each of the eight FOMC meetings, an announcement is made regarding the Fed’s decision to increase, decrease or maintain key interest rates.

The FOMC will announce its interest rate decision and pace of monthly asset purchases at 18:00 GMT. In case, the central bank’s members cut the monthly asset purchases by $10 billion (in line with expectations), this will certainly boost greenback’s demand.

Switzerland

Switzerland’s KOF (Konjunkturforschungsstelle) Leading Indicator probably improved to a reading of 101 in July from 100.4 in the previous month. It includes three different modules – core GDP, which excludes sectors such as banking and construction and represents about 92% of the overall economic output, Banking module and Construction module. The report is scheduled for publication at 7:00 GMT. Higher than expected readings would boost demand for the Swiss franc.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.9060. In case USD/CHF manages to breach the first resistance level at 0.9083, it will probably continue up to test 0.9097. In case the second key resistance is broken, the pair will probably attempt to advance to 0.9120.

If USD/CHF manages to breach the first key support at 0.9046, it will probably continue to slide and test 0.9023. With this second key support broken, the movement to the downside will probably continue to 0.9009.

In weekly terms, the central pivot point is at 0.9024. The three key resistance levels are as follows: R1 – 0.9076, R2 – 0.9104, R3 – 0.9156. The three key support levels are: S1 – 0.8996, S2 – 0.8944, S3 – 0.8916.