Binary Options Analysis – Trade of the Week: AUD/CHF 19th January 2015

Australia – New Motor Vehicle Sales

At GMT 12:30 a.m., the Australian Bureau of Statistics released the month-over-month new motor vehicle sales data, which measures the changes in the number of new cars and trucks sold in the domestic market in Australia.

The demand for new vehicles usually goes up when consumers feel confident about their future financial security and positive cash flow. Since this data is directly related to the consumer confidence, economists and binary options traders consider it to be a leading indicator of the overall economic condition in the country.

Last month, in December 2014, the Australian new motor vehicle sales (m/m) decreased by 0.5%. However, the low global oil price encouraged motor vehicle purchase during the reported month and it increased by 3.0%.

Switzerland – Producer Price Index (PPI)

At GMT 8:15 a.m., the Switzerland Federal Statistical Office will be releasing the month-over-month Producer Price Index (PPI), which measures the changes in the price of goods and raw materials bought by Swiss manufacturers during the previous month.

Binary options traders consider the Swiss Producer Price Index (PPI) to be a leading indicator of the consumer inflation because any substantial increase in the raw materials is passed on to the buyers of the finished products by manufacturers. Hence, an increase in PPI indicates rising prices at the consumer level, which contributes to overall national inflation.

In December 2014, the Swiss PPI (m/m) decreased by 0.7% and the forecast for January is set at another decrease of 0.6%. Since the whole Eurozone economy is facing deflation, it is expected that the price of raw materials will be falling in Switzerland as well. If the Swiss PPI (m/m) comes below -0.6%, it will help the Swiss Franc to depreciate.

Trade Recommendation for the AUD/CHF



When the Swiss National Bank (SNB) removed the artificial currency peg for the CHF against the EUR, it sharply appreciated and the price of EUR/CHF, USD/CHF, and AUD/CHF sharply declined. The removal of the currency peg and subsequent appreciation of the Swiss Franc meant that the Swiss export would become expensive in the global market, which in turn will put further pressure on the deflation problem.

Also, increasing motor vehicle sales in the Australia mean that people are rather optimistic about the Australian economy, which will play its part in the AUD/CHF valuation this week.

Under the circumstances, as long as the price stays below the historical resistance level at 0.7725, australia binary options traders are advised to look for the opportunity to place PUT orders in the AUD/CHF this week.

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About our Forex Analyst:  Asif Imtiaz

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