AUD/CHF Appears Bearish amid Declining Australian Trade Balance

Australia – Trade Balance

Today, at GMT 12:30 a.m., the Australian Bureau of Statistics released the monthly Trade Balance figure, which came out at -3.1 billion against an estimation of -2.48 billion.

Since the Trade Balance measures the difference in value between all import and export, including physical goods and intangible services, a positive figure suggests that there were more exports compared to imports. More exports increase the demand for the Australian currency as foreigners would need to convert their currency into Australian dollar for before paying for their imports. Hence,

This month’s trade balance was negative and worse than what the Australian binary options traders were expecting. Hence, it was considered as pessimistic news for the Australian Dollar.

Switzerland – Foreign Currency Reserves

On Wednesday, at GMT 7:00 a.m., the Swiss National Bank will release its foreign currency reserves figure, which measures the total value of foreign currency reserve held by the central bank.

The currency reserve usually goes down when the Swiss National Bank tries to defend the rate of the Swiss France in the open market, when the demand for the CHF is low. Hence, this figure can indicate how actively the central bank is participating in the market and. Hence, binary options investors consider this to be an important fundamental indicator of the CHF’s future directional movement against other major currencies.

In September, the Swiss foreign exchange reserves figure came out at 540 billion, compared to 531 billion in the previous month, which means the SNB is accumulating more currency reserves in order to keep the CHF from appreciating against major currencies. It indicates an increasing demand for the CHF.

Trade Recommendation for the AUD/CHF


Although the AUD/CHF showed a relatively range bound price action over the last few weeks, the overall trend has been down.

Earlier today, the AUD/CHF price was rejected around the intermediate pivot zone around the 0.6950 level and it is currency trading below yesterday’s high, indicating a possibility of forming a bearish pin bar.

From a fundamental perspective, the Swiss foreign currency reserve is indicating that the demand for the Swiss Franc is increasing. On the other hand, the Australian trade balance figure just came out worse than expected. Therefore, the overall fundamental outlook for the AUD/CHF would be bearish this week.

Under the circumstances, it is recommended that traders consider placing a PUT order for the AUD/CHF with their binary options trading brokers, once the price closes below yesterday’s high and forms a bearish pin bar. However, more conservative binary options brokers may like to wait for the AUD/CHF price to close below yesterday’s low, before placing the PUT order, which is at 0.6892.

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About our Forex and Binary Options Analyst:  Asif Imtiaz

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