Talking Points:
- Switzerland Trade Balance (Sep): 2.45B Actual vs 2.49B Estimated; 1.33B Prior.
- Switzerland Exports Real (MoM) (Sep): -3.3% Actual; -0.2% Prior.
- Switzerland Imports Real (MoM) (Sep): -7.4% Actual; 7.8% Prior.
Switzerland Trade Balance for the month of September recorded a trade surplus of CHF2.45 billion, up from CHF1.33 billion in the previous month. It faintly missed market expectations calling for a trade surplus of CHF2.49 billion. The Switzerland trade balance figures are an important gauge into pressures on the value of the CHF as its one of the biggest components of their Balance of Payments. The release of the data had limited impact on USD/CHF as it continued to trade firmly above 0.9400 level.
Later in the week, attention will transition to USD Consumer Price Index for the month of September, which will cross the wires on October 22 at 12:30 GMT. The core inflation data is expected to remain the same as the prior month’s reading of 1.7 percent, while the year-on-year CPI figure is expected to edge slightly lower to 1.6 percent from 1.7 percent. Moreover, both gauge for inflation remain below the Federal Reserve’s price-growth target of 2 percent, which may mean low rates for longer. This will potentially bode-ill for the US Dollar as it recently surged due to the anticipation of the Fed transitioning to normalize rates.
Focusing on technical setup, DailyFX Currency Strategist Ilya Spivak mentions near-term support to rest at 0.9312 (38.2% Fibonacci Retracement) and resistance at 0.9456 (23.6% Fibonacci Retracement). He remain on the sidelines for now but disciplinarily wait for a buying opportunity following confirmation that the pullback has been exhausted. Meanwhile according to DailyFX Speculative Sentiment Index, the ratio of long to short positions in the USD/CHF stands at 1.42 as 59 percent of traders are long.
