AUD/CHF Likely to Break Above Key Resistance if Swiss Trade Balance Declines

Switzerland – Trade Balance

On Tuesday, at GMT 7:00 a.m., the Swiss Federal Statistical Office will release the monthly trade balance figure. It measures the difference in value between net import and export of goods over the past month.

The demand for export has a direct correlation with the demand for the Swiss Franc. So, 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 5.65 billion. The forecast for this month is currently set at 4.38 billion.

Australia – CB Leading Index

On Tuesday, at GMT 3:30 p.m., the Conference Board Inc will release the month-over-month leading index for Australia. It measures the changes in the level of a composite index based on seven other major fundamental indicators.

The CB leading index aggregates some of the other indicator data. So, forex traders consider this to be an important representation of the overall Australian economy. However, since most of these data are previously released, the CB leading index tends to have a minimized immediate market impact.

Last month, the CB leading index came out at 0.1%. If the positive trend continues, it will likely have a bullish effect on the Australian Dollar.

AUD/CHF Forecast

AUD/CHF Technical Analysis December 20, 2021

Since October 27, 2021, the AUD/CHF remained bearish and formed a downtrend line. Over the last two months, it has fallen by around 7.5% or 520 pips. However, after reaching near the 0.6410 level on December 6, it started a bullish retracement. Over the last two weeks, the Relative Strength Index (RSI) indicator broke above the downtrend line on the Daily timeframe. Last week, the AUD/CHF tested the downtrend line but found resistance near the 0.6665 level. Currently, it is trading just below the downtrend line.

The Australian CB Leading Index went up by 0.1% last month and the uptrend line will likely continue. By contrast, analysts are expecting the Swiss trade balance to come down from 5.65 billion to 4.38 billion. We believe it would set a bullish fundamental outlook for the AUD/CHF this week. Therefore, if the AUD/CHF closes above the resistance near 0.6665, it would likely attract additional bullish momentum in the market.

Hence, binary options traders should look out for trading opportunities above this major resistance level around 0.6665.

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