Economic Events: (GMT)

Jan. 30  13:30                    USD                                                      Core PCE Price Index (MoM)                                                                                                      

                Tent                      EUR                                                       German CPI (MoM)                                                                                                        

                13:30                    USD                                                      Personal Spending (MoM)                                                                                                           

Jan. 31  07:45                    EUR                                                       French Consumer Spending (MoM)                                                                                                        

                08:55                    EUR                                                       German Unemployment Rate                                                                                                    

                08:55                    EUR                                                       German Unemployment Change                                                                                                              

                10:00                    EUR                                                       Unemployment Rate                                                                                                     

                13:30                    USD                                                      Employment Cost Index (QoQ)                                                                                                 

                14:45                    USD                                                      Chicago PMI                                                                                                      

                15:00                    USD                                                      CB Consumer Confidence                                                                                                            

Feb. 01 08:30                    CHF                                                       SVME PMI                                                                                                          

                09:00                    EUR                                                       Manufacturing PMI                                                                                                         

                09:30                    GBP                                                      Manufacturing PMI                                                                                                         

                10:00                    EUR                                                       CPI (YoY)                                                                                                             

                13:15                    USD                                                      ADP Nonfarm Employment Change                                                                                                         

                15:00                    USD                                                      ISM Manufacturing Index                                                                                                            

Feb. 02 13:30                    USD                                                      Nonfarm Productivity (QoQ)                                                                                                       

                13:30                    USD                                                      Initial Jobless Claims                                                                                                       

                13:30                    USD                                                      Unit Labor Costs (QoQ)                                                                                                                 

                13:30                    USD                                                      Continuing Jobless Claims                                                                                                            

Feb. 03 09:30                    GBP                                                      Services PMI                                                                                                     

                10:00                    EUR                                                       Retail Sales (MoM)                                                                                                          

                13:30                    USD                                                      Average Hourly Earnings (MoM)                                                                                                               

                13:30                    USD                                                      Nonfarm Payrolls                                                                                                             

                13:30                    USD                                                      Unemployment Rate                                                                                                     

                13:30                    USD                                                      Private Nonfarm Payrolls                                                                                                              

                15:00                    USD                                                      ISM Non-Manufacturing Index

Historical

Highest: 1.1664 CHF on 07 Jun 2010.

Average: 0.9699 CHF over this period.

Lowest: 0.7224 CHF on 09 Aug 2011.

Rules:

USD/CHF: The pair tends to break to an all-time low, then range back to the previous low. The ranges are very distinct. A break to the upside will likely meet another previous low. Pair are reliable.

Characteristics

Average broker spread: 4-5 pips  Daily range average: 120-135 pips  Best time to trade: Euro Session (0700 GMT - 1700 GMT)  Factors affecting the USD/CHF rate: 

  • Global stability and global recovery will send USD/CHF higher
  • USD/CHF rallies on geopolitical instability

Trading the USD/CHF 

Trading Experience: Moderate and Advanced currency traders  Trading Style: Day trading and Swing trades 

How to trade? 

1) Applying Technical Analysis Analyzing Fundamental News from the CHF and US zone to make USD/CHF trading decisions. 

2) Since the USD/CHF pair tends to be negatively correlated to the EUR/USD, it is always a good idea to compare both EUR/USD and USD/CHF charts in order to predict future moves, if EUR/USD breaks above an important resistance level and USD/CHF didn't break support level yet, the USD/CHF is very likely to break below support level. This also illustrates how EUR/USD tends to lead the move ahead of USD/CHF.

USD/CHF

USD/CHF Weekly Fundamental Analysis Jan. 30- Feb. 3, 2012, Forecast

Analysis and Recommendations:

USD/CHF closed the week at 0.9126

The Swiss National Bank stated that the Swiss Central bank will do its utmost to defend the euro/Swiss franc lower, at 1.20 exchange rates above the decision not to will change.

The KOF leading indicators for Switzerland plunged to a new low for the cycle and the lowest level since mid-2009, a development that is no doubt raising eyebrows at the still leaderless SNB and among Swiss government officials. This comes at the same time we are seeing notable stabilization elsewhere in the Euro Zone economies. The Swiss may be getting restless soon on the intervention front.

The USD dropped this week against all trading partners on the news from the FOMC keeping interest rates low through 2014 along with negative economic reports for unemployment and housing, even though the Durable Goods report was positive.

The KOF report for Switzerland will continue to weaken the Swissie and the USD should recover this week. Keep an eye here for a good trade.

The Good:

Italian and Spanish bond yields continue lower, 10 yr in Italy below 6%, Spain's below 5%

German IFO business confidence rises to 8 month high

 German consumer confidence at best since April

 Euro zone manufacturing and services composite index unexpectedly moves back above 50, led by Germany

 US Durable Goods orders in Dec surprise to upside but how much was pulled forward from 2012 due to 12/31 expiration of full depreciation expensing?

 Jan US confidence rises to best since Feb '11

 Richmond and KC manufacturing survey's both rise

Bank of Thailand cuts rates, Reserve Bank of India cuts reserve requirements

Greek Creditors announce agreement, deal to be finalized beginning of the week

The Bad:

 Portuguese yields spike, 5 yr CDS up 150 bps on week to new high and CDS insurance skyrockets

 Spanish unemployment for Q4 rises to 22.9%

 Italian consumer confidence holds at lowest since at least '96 when survey began

 Q4 US GDP rises 2.8%, a touch below expectations but nominal GDP gains just 3.2%, the weakest since Q3 '09. If deflator was in line with expectations, Real GDP would have been up just 1.3%. Real final sales up just .8% vs. 3.2% in Q3

 Initial Jobless Claims normalize at 377k after holiday distorted 356k last week

 Inflation expectations within UoM rise to 3.3%, the most since Sept and remains above the 20 yr avg of 3.0%. Expectations also rise to multi month highs in TIPS market

 New Home Sales remain weak, prices fall 12.8% y/o/y

 FOMC stretches out zero rates until late 2014, US$ resumes downward trend against everything. Fed destroying the price mechanism as if interest rates are artificially priced, what are assets really worth? If we don't know what assets are really worth, how can capital be efficiently allocated?

And, if ZIRP was effective, Japan's economy would have boomed over the past 10 yrs.

 Fitch rating service downgrades, Belgium, Cyprus, Italy, Slovenia and Spain 

This has been a busy week, for both the Euro and the USD, compounded by the World Economic Forum in Davos, giving a global platform for many government and business leaders to speak their minds.

As Greece seems to be resolved, Portugal will come to the forefront without giving the markets a minute to breath. Will we see a domino effect or not, can the EU and IMF raise enough money to ringfence these countries.

 

Upcoming Sovereign Bond Sales Dates

Jan 30  10:10  Italy   BTP/CCTeu auction

Jan 30  10:10  Norway  Nok 4.0bn 5.0% May 2015 bond

Jan 30  11:00  Belgium  OLO Auction

Jan 30  12:00  Norway  Details bond auction on Feb 06

Jan 31  10:30  Belgium  Auctions 3 & 6M T-bills

Jan 31  15:30  UK  Details gilt auction on Feb 07

Feb 01  10:10  Sweden  Auctions T-bills

Feb 01  10:30  Germany  Eur 5.0bn 2.0% Jan 2022 Bund

Feb 01  10:30  Portugal  Eur 0.75-1.0bn 3M T-bill

Feb 01  10.30  UK  Auctions 5.0% 2025 conventional Gilt

Feb 01  15:30  Sweden  Details nominal bond auction on Feb 08

Feb 01  16:00  US

Announces details of 3Y Notes on Feb 07, 10Y Notes on Feb

08 & 30Y Bonds on Feb 09

Feb 02  09:50  France  OAT Auction

Feb 02  10.30  UK  Auctions 0.125% 2029 I/L Gil

USD/CHF Pivot Points (Time Frame: 1 Day)
 

Name S3 S2 S1 Pivot R1 R2 R3

Classic
0.9072
0.9095
0.9131
0.9154
0.9190
0.9213
0.9249

Fibonacci
0.9095
0.9118
0.9132
0.9154
0.9177
0.9191
0.9213

Camarilla
0.9150
0.9155
0.9161
0.9154
0.9171
0.9177
0.9182

Woodie's
-
0.9098
0.9136
0.9157
0.9196
0.9216
-

DeMark's
-
-
0.9202
0.9160
0.9142
-
-