Switzerland – Trade Balance

Today, at GMT 6:00 a.m., the Swiss Federal Statistical Office released the monthly trade balance figure, which measures the difference in value between net import and export of goods over the past month.

Since the demand for export is directly correlated with the demand for the Swiss Franc, binary options traders analyze the monthly trade balance in order to gauge the strength of the CHF against other major currencies.

Last month, the Swiss trade balance figure came out at 2.86 billion and the forecast for this month was set a much lower figure compared to September, at 2.51 billion. However, the actual figure came out much better than expected, at 3.05 million.

Eurozone – German Flash Manufacturing PMI

Later in the week, on Friday, at GMT 7:30 a.m., the Markit will release the German Flash Manufacturing PMI data, which measures the level of a diffusion index based on surveying around 500 purchasing managers in the country.

Binary options investors consider the Flash Manufacturing PMI figure to be a leading indicator of the German economic climate as purchasing managers usually has the insight regarding business conditions such as employment, production capacity and new bulk orders and inventory situation.

Last month, the German Flash Manufacturing PMI figure came out at 52.3 and the forecast for this month is currently set at 51.8.

Trade Recommendation for the EUR/CHF

After being in a steady uptrend during June to August, the EUR/CHF price started consolidating for the last two months. However, this range bound price action also broke the primary uptrend line in the process.

Last week, the EUR/CHF price tested the secondary uptrend line, but failed to penetrate and close below it. Instead, it formed a Doji looking bar, and as the Monday daily candle did not penetrate the high or low of this Doji bar, it turned into an inside bar.

As the Swiss trade balance figure came out much better than what the market was expecting, the fundamental outlook for the EUR/CHF would remain bearish for now. Hence, if the EUR/CHF price penetrates and closes below last week’s low, it may 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 and closes below the 1.0780 level.

About our Forex and Binary Options Analyst:  Asif Imtiaz

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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