AUD/CHF Likely to Test Major Resistance Near 0.6900 If Swiss Inflation Decreases

AUDCHF – Technical Analysis for Binary Options Australia

Australia – Cash Rate

On Tuesday, at GMT 4:30 a.m., the Reserve Bank of Australia (RBA) will release the official cash rate. It is the interest rate that major Australian banks and financial institutions pay to borrow funds held at the RBA.

Short-term interest rates are the primary factor in the valuation of the Australian Dollar against other major currencies. So, Australian binary options traders pay close attention to any changes in the official cash rate.

The RBA left the cash rate at 1.25% in their last meeting. The forecast for this month is that the RBA will reduce the cash rate to 1.00%.

Switzerland – Consumer Price Index

On Thursday, at GMT 6:30 a.m., the Swiss Federal Statistical Office released the month-over-month consumer price index. It measures the changes in the price of products and services bought by the Australian consumers over the past month.

Binary options investors consider the Swiss CPI to be the most important fundamental indicator to measure the inflation in the economy. This is because the Swiss Central Bank also uses the CPI to decide about setting future overnight interest rates. Hence, a rising quarterly CPI signals to the binary options market that there would be an increase in the future interest rates.

Last month, the Swiss CPI increased by 0.3%. The forecast for this month is set at -0.1% decrease.

AUDCHF Forecast

AUDCHF Forecast - July 2 2019

The AUDCHF remained in a strong downtrend since April 18, 2019. Over the last two and half months, the pair fell by around 525 pips. However, it found a strong support near 0.6750. Over the last week, the AUD/CHF started a bullish retracement and broke above the long-term downtrend line. Currently, it is approaching the resistance near the 0.6900 level.

The RBA may reduce the overnight cash rate to 1.00%. However, the Swiss inflation will also likely to decrease by -0.01% over the last month. If the RBA keeps the cash rate at 1.25%, it will certainly help maintain the bullish momentum in the market. Hence, we believe it would set a bullish fundamental outlook for the AUDCHF this week. From a technical point of view, if the AUD/CHF closes above the resistance near 0.6900, it would likely attract additional bullish momentum in the market.

Hence, Australian binary options traders should look out for trading opportunities above this major resistance level around 0.6900.

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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