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USD/CHF on Swiss Manufacturing PMI


Mar.03.2014

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It’s Monday March 3rd and the pick of the day is USD/CHF. The first week of the month brings with it the all-important non-farm payrolls report from the US. The numbers will be affected by the bad weather once again, with forecasts generally being below 150k, which is effectively below the necessary breakeven of about 200k a job. The headline number of 6.6% unemployment is likely to hold, despite the decline, purely because of the amount of retiring people leaving the workforce. In Switzerland, Swiss manufacturing PMI came in better than expected this morning. we are unsure if the Swiss National Bank is going to be as protective of the currency’s high level as they were in 2011/2012. We'll also have to see the diplomatic efforts in the coming days and how the threat of sanctions on Russia reduce or increase the tension.

On the daily dance floor, the pair remains below the Ichimoku cloud, dancing within a downward channel with the Kijun line crossing below the Ichimoku cloud. On Friday the pair broke below the support level we talked about last week at 0.88338, giving us a further bearish bias for the pair.

USDCHF daily ichimoku downward channel support

Taking a look at the market sentiment, the speculative sentiment index of one of the major brokers in the US shows that 92% of their traders are long USD/CHF, and since we use this kind of indicator as a contrarian index to price action, this too gives us hints that the pair may continue its move downward to the 0.86 area.

Alternatively, an upward break above the 0.88 would call for further gains towards resistance levels at 0.89221, and 0.91304

Stay tuned for more updates and if you feel like you’re lost in translation with this report, come one over to InvestDiva.com and check out our straightforward and easy education program, and of course, have a great weekend everyone!

1 Kiana Danial Invest Diva

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