Forex Market: EUR/CHF trading forecast for Monday

Friday’s trade saw EUR/CHF within the range of 1.0448-1.0604. On November 5th the cross touched a daily high of 1.0646, or the highest level since January 15th, when a high of 1.2019 was recorded. The pair closed at 1.0472, losing 0.95% on a daily basis. EUR/CHF appreciated 0.71% for the whole week, which marked a second consecutive weekly gain, after a string of five successive weekly losses. On Monday (February 9th) the pair may be influenced by a number of fundamentals, as listed below.

Fundamentals

Euro area

German balance of trade

The surplus on German seasonally adjusted trade balance probably expanded to EUR 18.3 billion during December from a surplus figure of EUR 17.7 billion, registered in November. German total exports amounted to EUR 95.8 billion, while total imports were at the amount of EUR 78.0 billion in November. Imports increased at the annual rate of 1.7%, while exports grew at a pace of 1.4% in November. According to Destatis, Germany dispatched goods to the value of EUR 56.0 billion to the Member States of the European Union in November (a 4.8% increase from the same month a year ago), while it received goods to the value of EUR 51.4 billion from those countries (a 3.2% increase). Exports of goods to countries outside the European Union amounted to EUR 39.8 billion in November, while imports from those countries were estimated to EUR 26.6 billion.

The trade balance, as an indicator, measures the difference in value between the country’s exported and imported goods and services during the reported period. It reflects the net export of goods and services, or one of the components to form the country’s Gross Domestic Product. Generally, exports reflect economic growth, while imports indicate domestic demand.

Germany registers surpluses on its trade balance on a regular basis, due to nations strong export of automobiles and other machinery. The country also exports chemical products, hardware, electronic equipment, metals and pharmaceuticals, while its main imports include electronic devices, fuel, vehicle parts and metals.

In case the trade balance surplus increased more than anticipated, this would have a bullish effect on the euro. Statistisches Bundesamt Deutschland (the Federal Bureau of Statistics) will release the official trade data at 7:00 GMT.

Sentix Investor Confidence Index

Confidence among investors in the Euro zone probably improved during the current month, with the corresponding index coming in at a reading of 3.0. In January it stood at 0.9. If so, this would be the highest index reading since July 2014, when it was reported at 10.1. The index is based on results from the SENTIX survey, one of the most prominent surveys, reflecting investors’ opinion in Germany. It encompasses 2 800 respondents, with 510 of them being institutional investors. Respondents present their expectations regarding ten different markets for a period of one and six months. Readings above zero indicate that respondents were predominantly optimistic, while readings below zero show pessimism. Higher-than-expected readings would have a bullish effect on the common currency. The official index value is due out at 9:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.0508. In case EUR/CHF manages to breach the first resistance level at 1.0568, it will probably continue up to test 1.0664. In case the second key resistance is broken, the pair will probably attempt to advance to 1.0724.

If EUR/CHF manages to breach the first key support at 1.0412, it will probably continue to slide and test 1.0352. With this second key support broken, the movement to the downside will probably continue to 1.0256.

The mid-Pivot levels for Monday are as follows: M1 – 1.0304, M2 – 1.0382, M3 – 1.0460, M4 – 1.0538, M5 – 1.0616, M6 – 1.0694.

In weekly terms, the central pivot point is at 1.0501. The three key resistance levels are as follows: R1 – 1.0618, R2 – 1.0765, R3 – 1.0882. The three key support levels are: S1 – 1.0354, S2 – 1.0237, S3 – 1.0090.