According to statistics released yesterday from the State Secretariat for Economic Affairs (SECO), the Gross Domestic Product (GDP) in Switzerland grew by 0.4% on a quarterly basis, and 1.1% on annualized basis, with both figures coming in better than market analysts had predicted. The outcome was however described by analysts at ING as showing that overall cyclical slowdown was confirmed”.
The GDP boost was noted to have come mainly from exports of energy products, pharmaceuticals and chemicals, without which the numbers would have been very unimpressive. Some analysts even say that a GDP of close to zero would have been the outcome without the input of these exports. This is what caused the USDCHF to track upwards towards parity when the news was released.
Aside from the GDP data presented, the KOF Leading Indicator was also released, and it came in at 93.0, which was less than market consensus figure of 95.1 and below the previous figure of 94.8. This is the lowest that this indicator has been since 2015 and it has led to some selling of the Swiss Franc, pushing the USDCHF up by a few pips.
The release of the KOF Leading Indicator has pushed the USDCHF marginally above parity, where the pair is now trading at 1.00015. The price activity of USDCHF on the daily chart shows the pair tracking upwards within an ascending channel formation, with price encountering resistance at a zone where horizontal resistance intersects the channel’s return line.
A decisive close above the channel would be enough to take the pair above parity, with the near-term upside targets being located at 1.0095 (Feb 12 and May 31 highs) and 1.01190, where previous highs of November 8 2018, as well as March 12 and May 17 are located.
On the flip side, a break below the channel’s lower border (and by extension 0.9900) opens the door for a move towards 0.9811 (January 14, July 18 and September 6 lows). Below this level, further support can be found at 0.97139, where the previous lows of January 10, June 24 and August 23 are found.
The KOF Economic Barometer is an economic indicator with moderate market impact. This weak market impact and the lack of any major US releases may lead to marginal price movements on the USDCHF today. Price continues to hover around parity as at the time of writing.More content