Fundamentals Outlook
The economic data for the week ahead will see the Eurozone’s manufacturing and services PMI numbers coming out. Given that the flash PMI’s signaled a modest decline in both the sectors, the markets will be looking to see how the Eurozone’s economic activity fared in the month of October. Data from Japan and Switzerland are relatively quiet for the most part of this week. Data from Japan will see some second tier data coming out. The BoJ will be releasing its monetary policy meeting minutes earlier in the week.
The economic data from the U.S. is also fairly quiet. The big event this week will be the U.S. mid-term elections. This could potentially keep the markets on the edge. Economic data over the week will see the release of the U.S. producer prices index and the ISM’s non-manufacturing PMI report. The FOMC will be holding its placeholder meeting on Thursday. No changes are expected at this week’s monetary policy meeting as the Fed will prepare the market for a December rate hike.
Chart set up: The USDCHF closed last week above parity. This comes after the previous week’s attempt which saw prices briefly testing parity before closing weaker. However there are signs that the USDCHF’s rally is nearing its exhaustion as the currency pair attempts to break past the resistance level of 1.0048.
Key support/resistance levels:
Support: 0.9967; Resistance: 1.0048
Commentary:
With USDCHF remains trading near the highs of the rally. The 4-hour Stochastics being in the oversold levels is likely to see the upside prevail. However, as the USDCHF turns flat near the top it is clear that the resistance level of 1.0048 remains a strong level. A catalyst is needed to break past this level which could come this week. The outcome of the U.S. elections could dictate the near term direction of the trend. Watch for a potential break down below the support at 0.9967. For the week ahead, USDCHF is expected to be bearish.
Previous USDCHF Weekly Forex Forecast
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