Forex Market: EUR/CHF daily trading forecast

Yesterday’s trade saw EUR/CHF within the range of 1.1993-1.2024. The pair closed at 1.2012, losing 0.01% on a daily basis.

At 7:23 GMT today EUR/CHF was unchanged for the day to trade at 1.2012. The pair touched a daily low at 1.2011 at 7:05 GMT.

Fundamentals

Euro zone

Euro zone Current account

The surplus on Euro zones current account probably shrank to 9.4 billion EUR in September from 15.1 billion EUR in August. Regions seasonally adjusted current account had a surplus of 18.9 billion EUR in August.

The current account reflects the difference between savings and investments in the Euro area. It is the sum of the balance of trade, net current transfers (cash transfers) and net income from abroad (earnings from investments made abroad plus money sent by individuals working abroad to their families back home, minus payments made to foreign investors).

A current account surplus indicates that the net foreign assets of the region have increased by the respective amount, while a deficit suggests the opposite. A nation with a surplus on its current account is considered as a net lender to the rest of the world, while a current account deficit puts it in the position of a net borrower. A net lender is consuming less than it is producing, which means it is saving and those savings are being invested abroad, or foreign assets are created. A net borrower is consuming more than it is producing, which means that other countries are lending it their savings, or foreign liabilities are created. A contracting surplus or an expanding deficit on the areas current account usually has a bearish effect on the euro.

The European Central Bank is expected to release the official data at 9:00 GMT.

Euro zone Construction output

At 10:00 GMT Eurostat is to report on construction activity in the Euro zone for September. Seasonally adjusted construction output in the region increased 1.5% in August compared to a month ago. In annual terms, output shrank 0.3% in August. This indicator reflects how resilient construction sector development is and also provides clues over investment activity. Higher rates of increase in output usually provide a limited support to the common currency.

Switzerland

At 10:00 GMT the ZEW Institute is to announce the official Economic Sentiment index reading in November. In October the index plunged to -30.7 from -7.7, registered in the preceding month. Octobers value has been the lowest since September 2012, when the gauge came in at -34.9. The ZEW (Zentrum für Europäische Wirtschaftsforschung) economic expectations index is published on a monthly basis. The study encompasses up to 350 financial and economic analysts. The indicator reflects the difference between the share of analysts, that are optimistic and those, that are pessimistic about economic development in Switzerland over the next six months. A positive value indicates that the proportion of optimists is larger than that of pessimists. A ZEW reading of -100 suggests that all analysts are pessimistic about the current developments and expect economic conditions to deteriorate. A ZEW reading of 100 implies that all analysts are optimistic about the current situation and expect conditions to improve. A ZEW reading of 0 indicates neutrality. Lower-than-projected readings would have a bearish effect on the franc.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2010. In case EUR/CHF manages to breach the first resistance level at 1.2026, it will probably continue up to test 1.2041. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2057.

If EUR/CHF manages to breach the first key support at 1.2000, it will probably continue to slide and test 1.1979. With this second key support broken, the movement to the downside will probably continue to 1.1964.

The mid-Pivot levels for today are as follows: M1 – 1.1972, M2 – 1.1987, M3 – 1.2003, M4 – 1.2018, M5 – 1.2034, M6 – 1.2049.

In weekly terms, the central pivot point is at 1.2022. The three key resistance levels are as follows: R1 – 1.2042, R2 – 1.2076, R3 – 1.2096. The three key support levels are: S1 – 1.2000, S2 – 1.1968, S3 – 1.1934.