Forex Market: AUD/CHF forecast for Monday

Friday’s trade saw AUD/CHF within the range of 0.8416-0.8466. The pair closed at 0.8439, losing 0.08% on a daily basis and 0.73% for the whole week.

Fundamental view

Australia

At 0:30 GMT on Monday (August 4th) the University of Melbourne will release its estimate of inflation in Australian economy during July. Annualized inflation estimate for June was 3.0%. If inflation rate rises, this bolsters the case for an interest rate hike by the Reserve Bank of Australia (RBA), which usually has a bullish effect on the national currency. It is so, because assets, offering higher yields tend to attract more international investors, which will usually increase demand for the domestic currency.

At 2:30 GMT on Monday the Australia and New Zealand Banking Group (ANZ) will publish data regarding the number of job advertisements in Australia in July. It encompasses advertisements in the major metropolitan newspapers and on the internet sites. The corresponding index, based on a survey by ANZ, climbed 4.3% in June compared to May. This indicator is used for projecting growth in employment in Australia, as it reflects labor market conditions in the future. An increase in the number of jobs would have a bullish effect on the Aussie.

At 23:30 GMT the Australian Industry Group (AIG) is expected to announce the results from its survey on short-term and intermediate-term conditions in countrys services sector during July. Surveyed companies answer questions associated with production, employment, prices, supplier deliveries, inventories and new orders. The seasonally adjusted Performance of Services Index (PSI) for Australia came in at a reading of 47.6 in June. Values below the key level of 50.0 are indicative of pessimism (contraction in activity). An improvement in the value of this indicator would provide a certain support to Australian dollar.

Switzerland

Activity in Switzerland’s manufacturing sector probably continued to expand in July. The SVME Manufacturing Purchasing Managers Index (PMI) probably climbed to a reading of 54.31 last month, according to the median forecast by experts, from 54.0 in June. This indicator provides clues over growth of production in the country.

The PMI is based on a monthly survey, where participants can either respond with “better”, “same”, or “worse” to the questions about the industry, in which they operate. The resulting PMI value is measured from 0 to 100. If the index shows a value of 100.0, this means that 100% of the respondents reported an improvement in conditions. If the index shows a value of 0, this means that 100% or the respondents reported a deterioration in conditions. If 100% of the respondents saw no change in conditions, the index will show a reading of 50.0. Therefore, values above 50.0 are indicative of optimism (expansion in the sector). Higher than expected PMI readings would support the franc. The SVME (Schweizerischer Verband für Materialwirtschaft und Einkauf) in cooperation with Credit Suisse will release the official data at 7:30 GMT on Monday.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.8440. In case AUD/CHF manages to breach the first resistance level at 0.8465, it will probably continue up to test 0.8490. In case the second key resistance is broken, the pair will probably attempt to advance to 0.8515.

If AUD/CHF manages to breach the first key support at 0.8415, it will probably continue to slide and test 0.8390. With this second key support broken, the movement to the downside will probably continue to 0.8365.

In weekly terms, the central pivot point is at 0.8456. The three key resistance levels are as follows: R1 – 0.8497, R2 – 0.8554, R3 – 0.8595. The three key support levels are: S1 – 0.8399, S2 – 0.8358, S3 – 0.8301.