AUD/CHF Tests Key Support As Swiss Libor Rate Likely to Remain Negative

Australia – CB Leading Index

On Monday, at GMT 2:30 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 seven other major fundamental indicators.

The CB leading index aggregates some of the other indicator data. So, binary options 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 decreased by 0.2%. If the positive trend continues this month, it would likely have a bullish influence on the Australian Dollar against other major currencies.

Switzerland – Libor Rate

On Thursday, at GMT 7:30 a.m., the Swiss National Bank (SNB) will release the Libor rate. It measures the London interest rate for 3-month Swiss Franc deposits.

The overnight interest rate is the most important factor of a fiat currency’s valuation. Hence, binary options investors consider the Swiss Libor rate to be an important fundamental indicator of the Swiss currency.

Last month, the SNB kept the Libor rate at -0.75%. The forecast for this month is that the SNB will leave it unchanged at -0.75% for the time being.

AUD/CHF Forecast

On April 4, the AUD/CHF broke above the resistance around 0.7400. Since then, it remained range bound and traded within the narrow range between the 0.7400 and 0.7550 levels. Last week, the AUD/CHF once again tested the support near 0.7400. However, so far, it has failed to penetrate below this level.

The Australian CB leading index grew 0.2% last month. On the other hand, analysts are expecting the Swiss Libor rate to remain unchanged at -0.75%. The negative Libor rate is certainly going to keep the Swiss Franc on a bearish note against the Australian Dollar. Therefore, we believe it would set a bearish fundamental outlook for the AUD/CHF this week. Under the circumstances, if the AUD/CHF closes below the support near 0.7400, it would likely attract additional bearish momentum in the market.

Hence, Australian binary options traders should look out for trading opportunities below this major support level around 0.7400.

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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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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