EUR/CHF Forms Bearish Pin Bar amid Forecast of Low German Economic Sentiment

Eurozone – German ZEW Economic Sentiment

Tomorrow, at GMT 9:00 a.m., the Zentrum fur Europaische Wirtschaftsforschung (ZEW) will release its German economic sentiment index, which measures the level of a diffusion index based on surveying 275 German institutional investors and market analysts.

Since the professional investment community, investors and analysts have the latest data; their reflection about the economy tends to be the most accurate. Therefore, binary options investors consider the ZEW’s German economic sentiment index to be a leading indicator of the entire Eurozone economy. This is because the German economy is one the most important driving forces behind the Euro currency.

Last month, the ZEW German economic sentiment came out at 25.0, and this month the forecast is set at a very pessimistic level, at 18.3.

Switzerland – Libor Rate

Later in the week, on Thursday, at GMT 7:30 a.m., the Swiss National Bank will release the Libor rate, which measures the London interest rate for 3-month Swiss Franc deposits.

Since the overnight interest rate is the most important factor of a fiat currency’s valuation, binary options traders consider the Swiss Libor rate to be an important fundamental indicator of the Swiss currency.

In June, the SNB kept the Libor rate at -0.75% and the forecast for September is that they would leave it unchanged for the time being.

Trade Recommendation for the EUR/CHF


Although the EUR/CHF has been on a steady uptrend since April and the pair just closed above the important resistance level around 1.0950 just last week, it formed a bearish pin bar on September 11, 2015.

As the SNB is expected to leave the Libor rate at -0.75%, and the German ZEW economic sentiment is expected to fall around 7 points, the fundamental outlook for the EUR/CHF is also very bearish this week.

If the EUR/CHF price penetrates below the low of this bearish pin bar, 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 EUR/CHF with their binary options brokers, once the price penetrates below the low of September 11, which is at 1.0964.

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About our Forex and Binary Options Analyst:  Asif Imtiaz

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