USD/CHF Bearish Outside Bar Signals Continuation of Downtrend

United States – Building Permits

On Wednesday, at GMT 12:30 p.m., the US Census Bureau will release the Building Permits figure, which is an annualized number of new building permits for the residential housing sector issued during the last month.

Since getting a building permit usually indicate future construction work, binary options investors consider this data to be a leading indicator of the overall economic activity in the country.

Last month, 1.20 million building permits were issued and this month, analysts are expecting the figure to come out around 1.20 million.

Switzerland – Libor Rate

On Thursday, at GMT 8:30 a.m., the Swiss National Bank will release the Libor rate, which measures the London interest rate for 3-month Swiss Franc deposits.

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

In February, the SNB kept the Libor rate at -0.75% and the forecast for March is that they would leave it unchanged for the time being.

Trade Recommendation for the USD/CHF


Since forming the bullish pin bar on February 11, the USD/CHF price has remained very bullish and the momentum carried the price towards the psychologically important 1.0000 pivot level. The bullish move also helped form an uptrend line in the process.

However, on March 3, the USD/CHF price penetrated and closed below the uptrend line. Although the USD/CHF price went on to penetrate above the 1.0000 level last week, a lack of bullish momentum in the market translated into a bearish outside bar (BEOB) on March 10. Last Friday, the USD/CHF price penetrated below the low of the BEOB bar, indicating additional bearishness this week.

As the Swiss National Bank is expected to leave the Libor rate unchanged at -0.75% and the US building permits figure is also expected to remain unchanged near 1.20 million, the fundamental outlook for the USD/CHF is likely to support the current prevailing trend, which is bearish.

Hence, it would be recommended that binary options traders consider placing a PUT order for the USD/CHF with their binary options brokers once the price closes below the 0.9810 level, which the low of the BEOB bar from March 10.

Recommended Broker for US traders: Finpari

Recommended Broker for Non-US Traders: Binary Brokerz

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