Forex Market: USD/CHF daily trading forecast

Yesterday’s trade saw USD/CHF within the range of 0.9449-0.9514. The pair closed at 0.9466, gaining 0.12% on a daily basis.

At 7:04 GMT today USD/CHF was up 0.06% for the day to trade at 0.9472. The pair broke the first key weekly resistance and touched a daily high at 0.9484 at 6:45 GMT.

Fundamental view

United States

Final Gross Domestic Product

The final estimate of the US Gross Domestic Product probably pointed to an annualized rate of growth of 4.6% in the second quarter of the year. The 2nd GDP estimate, reported on August 28th, pointed to a 4.2% growth. The increase in real GDP in Q2 primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased, according to the Bureau of Economic Analysis. Real personal consumption expenditures rose 2.5% in the second quarter, compared with an increase of 1.2% in Q1. Durable goods increased 14.3%, compared with an increase of 3.2%. Nondurable goods increased 1.9% in the second quarter, after remaining unchanged in the first. Services increased 0.8%, compared with an increase of 1.3% in Q1.

The report on GDP holds a lot of weight for traders, operating in the Foreign Exchange Market. It serves as evidence of growth in a productive economy, or as evidence of contraction in an unproductive one. As a result, currency traders will look for higher rates of growth as a sign that interest rates will follow the same direction. Higher interest rates will attract more investors which in terms will increase demand for the common currency. If an economy is experiencing a robust rate of growth, the benefits will eventually affect the end consumer, because of the increased likelihood of spending. Furthermore, through increased consumer expenditures the economy has the potential to expand even more. In case the final GDP exceeded expectations, this would certainly heighten the appeal of the greenback. The official data is due out at 12:30 GMT.

Reuters/Michigan Confidence

The monthly survey by Thomson Reuters and the University of Michigan may show that consumer confidence in the United States improved in September. The final reading of the corresponding index, which usually comes out two weeks after the preliminary data, probably rose to 84.7 during the current month, while the preliminary figure, reported on September 12th, pointed to 82.5, or the highest level since July 2013.

The survey encompasses about 500 respondents throughout the country. The index is comprised by two major components, a gauge of current conditions and a gauge of expectations. The current conditions index is based on the answers to two standard questions, while the index of expectations is based on three standard questions. All five questions have an equal weight in determining the value of the overall index. The sub-index of current economic conditions dropped to a preliminary reading of 98.5 in September from 99.8 in August (the highest level since July 2007), while the gauge of consumer expectations rose to 75.6 this month from 71.3 in August, according to data by Thomson Reuters/University of Michigan.

In case the gauge of consumer sentiment showed a larger improvement than projected, this would boost demand for the US dollar. The final reading is due out at 13:55 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.9476. In case USD/CHF manages to breach the first resistance level at 0.9504, it will probably continue up to test 0.9541. In case the second key resistance is broken, the pair will probably attempt to advance to 0.9569.

If USD/CHF manages to breach the first key support at 0.9439, it will probably continue to slide and test 0.9411. With this second key support broken, the movement to the downside will probably continue to 0.9374.

The mid-Pivot levels for today are as follows: M1 – 0.9393, M2 – 0.9425, M3 – 0.9458, M4 – 0.9490, M5 – 0.9523, M6 – 0.9555.

In weekly terms, the central pivot point is at 0.9381. The three key resistance levels are as follows: R1 – 0.9463, R2 – 0.9517, R3 – 0.9599. The three key support levels are: S1 – 0.9327, S2 – 0.9245, S3 – 0.9191.

In case of a very strong final GDP estimate, how strong impact on USD/CHF do you expect?

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