USDCHF Likely to Turn Bullish Amid Decreasing Swiss PPI

Switzerland – Producer Price Index (PPI)

On Monday, at GMT 8:15 a.m., the Swiss Federal Statistical Office will release the month-over-month Producer Price Index (PPI), which measures the changes in the price of goods and raw materials bought by Swiss manufacturers during the previous month.

Binary options traders consider the Swiss Producer Price Index (PPI) to be a leading indicator of the consumer inflation because any substantial increase in the raw materials is passed on to the buyers of the finished products by manufacturers. Hence, an increase in PPI indicates rising prices at the consumer level, which contributes to overall national inflation.

Last month, the Swiss PPI (m/m) increased by 0.1% and the forecast for August is set at a decrease of 0.2%.

United States – Building Permits

On Tuesday, at GMT 1:30 p.m., the US Census Bureau released 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, and construction work usually increases the demand for products and services in the local area, binary options investors consider this data to be a leading indicator of the overall economic activity in the country.

Last month, 1.15 million building permits were issued and this month, analysts are expecting the figure to come out around 1.16 million.

Trade Recommendation for the USDCHF

USDCHF- binary options analysis

Over the last two months, the USDCHF price remained within a tight range between the 0.9520 and 0.9920 levels. The range seems to be getting narrower over the last two weeks, especially, after the USD/CHF price bounced off the resistance near 0.9920 level and formed a bearish pin bar on July 27.

Last week, the USDCHF once again indicated a reversal after forming two consecutive bullish pin bars, which failed to penetrate above the intermediate resistance level around 0.9765.

As the US building permits figure is expected to remain somewhat unchanged over the last month and the Swiss PII figure is expected to decrease by 0.2%, the fundamental outlook for the USD/CHF would likely remain bullish this week. Therefore, if the USDCHF price penetrates above the high of the two pin bars from last week, which is at 0.9765, it would likely attract additional bullish momentum in the market.

Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the USD/CHF with their top binary options brokers as soon as the price penetrates above the 0.9765 level on the daily chart.

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