GBP/CHF May Decline Further amid Strong Swiss Employment Level

Switzerland – Employment Level

Today, at GMT 7:15 a.m., the Swiss Federal Statistical Office released the employment level figure, which measures the number of employed people over the last quarter.

Since binary options traders consider the job creation to be an important leading indicator of the overall economic health of Switzerland, it acts as a leading indicator of consumer confidence and spending in the country.

In May, the Swiss employment level figure was at 4.23 million and the forecast for last quarter was set at 4.24 million. The actual figure came out exactly at 4.24 million, matching what the binary options market was expecting.

United Kingdom – GDP Second Estimate

On Thursday, the UK’s Office for National Statistics will release the quarter-over-quarter second estimate of the GDP, which measures the changes in the inflation adjusted value of all products and service made in the country over the past quarter.

Since GDP measures the overall productivity in the economy, the second estimate acts as a leading indicator of the actual GDP growth level. Hence, binary options investors consider the UK’s second estimate GDP (q/q) to be an important indicator of the health of the economy.

Last quarter, the second estimate GDP was at 0.7% growth and the forecast for this quarter is also set at an additional 0.7% growth.

Trade Recommendation for the GBP/CHF

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Since May 7, 2015, the GBP/CHF has been gradually climbing up and formed a well-respected upward sloping trend line in the process.

Last week, as the global equity market was falling, the Swiss Franc started to appreciate against all other major currencies because investors consider it to be a “safe haven” currency. When the outlook for the global economy is in concern, investors tend to concern their liquid assets into precious metal and the currencies of stable economies.

As the Swiss employment level matched the market’s expectation, the GBP/CHF penetrated and closed below the medium term uptrend line on August 21.

Yesterday, it had another large decline as the price fell by as much as 250 pips. However, as soon as the price reached near the 50% retracement level of the last major upswing, the GBP/CHF price found strong support and started an upward retracement.

Currently, is retraced back towards the uptrend line and trading near the psychological resistance ne around the 1.4850 level. If the GBP/CHF price resumes the downtrend and penetrates below yesterday’s low, it would certainly attract additional bearish momentum in the market.

Under the circumstances, it is recommended that traders consider placing a PUT order for the GBP/CHF with their binary options brokers, once the price penetrates and closes below the low of August 24, which is at 1.4600.

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About our Forex and Binary Options Analyst:  Asif Imtiaz

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