Forex Market: USD/CHF daily trading forecast

Yesterday’s trade saw USD/CHF within the range of 0.9627-0.9500. The pair closed at 0.9547, losing 0.19% on a daily basis.

At 06:58 GMT today USD/CHF was down 0.28% for the day to trade at 0.9524. The cross ranged between 0.9522 and 0.9562 during the day.

Fundamentals

United States

House prices in the US probably jumped 0.7% on a monthly basis in February following a 0.3% increase in January, the Federal Housing Finance Agency is expected to report at 13:00 GMT. If confirmed, this would be the fifth straight monthly gain. Year-on-year, house prices were up 5.1% in January.

This index is based on data provided by Fannie Mae and Freddie Mac and is designed to reflect the average change in house prices across the country or a specific area. A higher-than-expected reading suggests an improvement in the housing market, thus in overall economic activity, and generally has a bullish effect on the US dollar.

Existing home sales

Due out later in the day is the index of existing US home sales. The gauge probably gained 3.0% on a monthly basis in March to the annualized level of 5.03 million. In February compared to January, existing home sales rose 1.2% to 4.88 million. The sample of data encompasses condos, co-ops and single-family houses.

Statistical data on existing home sales is often used along with statistical figures regarding the new home sales and pending home sales, with the major objective being to draw a conclusion how the nation’s housing sector is performing, regardless of interest rates. The most active house-purchasing period in the United States is usually between the months of March through June. Therefore, in case statistical data revealed a sudden drop in the number of homes sold rather than an improvement during this period, this would be considered as a signal of weakness in country’s housing market.

The report on existing home sales usually does not cause a real direct impact on the US economy. Actually, this effect appears to be minimal, due to the fact that nothing is produced with the mere sale of an existing home. In terms of economic activity, the sale of an existing house may be related only to interior design and purchases of new furniture.

The reason markets pay a certain attention to the existing home sales report is that it reveals much about the general course of nation’s economy. A major part of the population considers a house as a sign of wealth and, unlike the money wealth which is concentrated in certain regions of the country and held by the wealthiest representatives of the population, ”housing wealth” is evenly distributed across the country.

In case the index increased more than anticipated, this would have a bullish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 14:00 GMT.

Switzerland

At 10:00 GMT the ZEW Institute is to announce the official Economic Sentiment index reading for April. In March, the index remained firmly in negative territory at -37.9 following a plunge to -73.0 in February, which was the lowest since September 2011.

The ZEW (Zentrum für Europäische Wirtschaftsforschung) economic expectations index is published on a monthly basis, with the study encompassing up to 350 financial and economic analysts. The indicator reflects the difference between the share of analysts who 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. Negative readings, especially those showing an accelerating pessimistic trend, have a bearish effect on the franc, and vice versa.

Pivot points

According to Binary Tribune’s daily analysis, the pair’s central pivot point stands at 0.9558. In case it penetrates the first resistance level at 0.9616, it will encounter next resistance at 0.9685. If breached, upside movement may attempt to advance to 0.9743.

If the cross drops below its S1 level at 0.9489, it will next see support at 0.9431. If the second key support zone is breached, downward movement may extend to 0.9362.

In weekly terms, the central pivot point is at 0.9625. The three key resistance levels are as follows: R1 – 0.9760, R2 – 1.0001, R3 – 1.0136. The three key support levels are: S1 – 0.9384, S2 – 0.9249, S3 – 0.9008.