Forex Market: EUR/CHF daily trading forecast

Yesterday’s trade saw EUR/CHF within the range of 1.2076-1.2123. The pair closed at 1.2110, gaining 0.20% on a daily basis.

At 6:22 GMT today EUR/CHF was up 0.03% for the day to trade at 1.2109. The pair touched a daily high at 1.2113 at 6:00 GMT.

Fundamental view

Switzerland

The Swiss National Bank (SNB) will probably leave its benchmark interest rate (the three-month Swiss franc Libor) unchanged within the target range of 0.0-0.25% at the policy meeting today, according to the median forecast by experts. At its meeting on June 19th the central bank also kept the minimum exchange rate at CHF 1.20 per euro, while revising up its inflation forecast for 2014.

According to an extract from banks Monetary Policy press release: ”The path of the SNB’s conditional inflation forecast of June points to lower inflationary pressure in the medium term. The inflation forecast for the coming quarters is actually slightly higher than in March, given the fact that inflation was somewhat higher in May than expected and the departure point for the forecast has moved upwards as a result. Nevertheless from mid-2015 onwards, inflation will be lower than forecast in the previous quarter. This is due to the modest global economic outlook and unexpectedly low inflation in the euro area. At 0.1%, the inflation forecast for the current year is 0.1 percentage points higher than in March. For 2015 and 2016, the new forecast – of 0.3% for 2015 and 0.9% for 2016 – is 0.1 percentage points lower, in each case, than at the previous monetary policy assessment. As in the previous quarter, the forecast is based on a three-month Libor of 0.0% for the next three years and expects that the Swiss franc will weaken over the forecast horizon. Consequently, there are no signs of any inflation risks in Switzerland in the foreseeable future.”

The official policy decision is scheduled to be announced at 7:00 GMT.

Additionally, at 7:30 GMT the chairman of the governing board of the SNB, Thomas Jordan, is to take a statement.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2103. In case EUR/CHF manages to breach the first resistance level at 1.2130, it will probably continue up to test 1.2150. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2177.

If EUR/CHF manages to breach the first key support at 1.2083, it will probably continue to slide and test 1.2056. With this second key support broken, the movement to the downside will probably continue to 1.2036.

The mid-Pivot levels for today are as follows: M1 – 1.2046, M2 – 1.2070, M3 – 1.2093, M4 – 1.2117, M5 – 1.2140, M6 – 1.2164.

In weekly terms, the central pivot point is at 1.2087. The three key resistance levels are as follows: R1 – 1.2136, R2 – 1.2167, R3 – 1.2216. The three key support levels are: S1 – 1.2056, S2 – 1.2007, S3 – 1.1976.