Forex Market: USD/CHF daily trading forecast

Yesterday’s trade saw USD/CHF within the range of 0.8574-0.8804. The pair closed at 0.8796, gaining 2.48% on a daily basis.

At 8:02 GMT today USD/CHF was down 0.23% for the day to trade at 0.8775. The pair touched a daily low at 0.8774 at 8:01 GMT.

Fundamentals

United States

NAHB Housing Market Index

The National Association of Home Builders (NAHB) Housing Market Index probably continued to rise in January, reaching 58.0, according to expectations, from 57.0 in December. If so, this would be the highest index reading since September, when the indicator stood at 59.0. It is based on a monthly survey in regard to current home sales and expected sales in the coming six months. Values above the key level of 50.0 indicate that housing market conditions are good. Therefore, higher-than-projected readings would provide support to the greenback. The official data is scheduled for release at 15:00 GMT.

Diverging forecasts

The Swiss franc will probably appreciate about 10% to 92.50 centimes per euro by March, according to JP Morgan Chase & Co., one of the five largest currency dealers, according to Bloomberg. While the New York-based bank projects a stronger Swiss currency at year-end, UBS Group AG sees the franc depreciating, due to the stimulus measures by the European Central Bank, aimed to help the regions economy recover. UBS expects that the franc will slip to 1.05 per euro within a period of 12 months.

In addition, Citigroup expects a bearish scenario as well, as it says the Swiss franc will probably drop to 1.06 per euro by the end of 2015, from 97 centimes during the first quarter of the year.

“With the floor now gone, the clear danger is of an undershoot in euro/franc versus its sustainable equilibrium value, which we put close to 1.10,” said Paul Meggyesi, a foreign-exchange strategist at JP Morgan in London, cited by the same media. The gains will be supported by an “accelerated unwinding of non-resident funding in francs”.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.8725. In case USD/CHF manages to breach the first resistance level at 0.8875, it will probably continue up to test 0.8955. In case the second key resistance is broken, the pair will probably attempt to advance to 0.9105.

If USD/CHF manages to breach the first key support at 0.8645, it will probably continue to slide and test 0.8495. With this second key support broken, the movement to the downside will probably continue to 0.8415.

The mid-Pivot levels for today are as follows: M1 – 0.8455, M2 – 0.8570, M3 – 0.8685, M4 – 0.8800, M5 – 0.8915, M6 – 0.9030.

In weekly terms, the central pivot point is at 0.8726. The three key resistance levels are as follows: R1 – 1.0092, R2 – 1.1609, R3 – 1.2975. The three key support levels are: S1 – 0.7209, S2 – 0.5843, S3 – 0.4326.