EUR/CHF Fundamental Analysis April 5, 2012, Forecast

By FXEmpire.com

Analysis and Recommendations:

EUR/CHF is trading dangerously close to the SNB point of no return. The euro fell in today’s session hitting a low of 1.2032 and ending the day at 1.2034. The SNB will intervene if the euro hits the 1.20 price.

The euro was trading a bit lower against the Franc on Wednesday; erasing earlier gains after the Federal Reserve said it was growing increasingly unlikely to roll out monetary stimulus programs to spur the economy, which sparked a global dollar rush. The euro has continued to fall against its major trading partners since the announcement last evening.

There was no supportive data for the Swissie today.

The European Central Bank leaves its key lending rate unchanged at 1%, as expected, while ECB President Mario Draghi is expected to maintain a wait-and-see stance when he hosts his monthly news conference

European Central Bank President Mario Draghi said Wednesday in his monthly news conference that governments in the euro zone needed to meet their responsibilities for ensuring sound structural reforms and fiscal positions, and that these were essential for economic growth. He also said that while funding conditions for banks in the region had generally improved, it was now necessary for financial institutions to strengthen their resilience further. Draghi said that any talk of an “exit strategy” in terms of ECB monetary policy is premature. Draghi said that inflation in the euro area is expected to stay above 2% in 2012.

As markets calm, the euro should be able to regain a bit of strength and perhaps move close to the 1.2050 price of earlier in the week.

Economic Events April 4, 2012 actual v. forecast

AUD	Trade Balance	-0.48B	1.00B	-0.97B
GBP	Halifax House Price Index (MoM)	2.2%	-0.3%	-0.4%
GBP	Services PMI	55.3	53.5	53.8
EUR	Retail Sales (MoM)	-0.1%	0.1%	1.1%
EUR	German Factory Orders (MoM)	0.3%	1.2%	-1.8%
PLN	Polish Interest Rate Decision	4.50%	4.50%	4.50%
EUR	Interest Rate Decision	1.00%	1.00%	1.00%
USD	Treasury Secretary Geithner Speaks
RUB	Russian CPI (MoM)	0.6%	0.5%	0.4%
USD	ADP Nonfarm Employment Change	209K	200K	230K
EUR	ECB Press Conference
USD	ISM Non-Manufacturing Index	56.0	57.0	57.3

Economic Events scheduled for April 5, 2012 that affect the European Markets

08:15 CHF CPI (MoM) 0.4% 0.3%

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

08:30 EUR Dutch CPI (YoY) 2.50%

Consumer Price index is the most frequently used indicator of inflation and reflect changes in the cost of acquiring a fixed basket of goods and services by the average consumer. The weights are usually derived from household expenditure surveys.

09:30 GBP Industrial Production (MoM) 0.3% -0.4%

09:30 GBP Manufacturing Production (MoM) 0.1% 0.1%

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. Manufacturing Production measures the change in the total inflation-adjusted value of output produced by manufacturers. Manufacturing accounts for approximately 80% of overall Industrial Production.

12:00 GBP Interest Rate Decision 0.50% 0.50%

12:00 GBP BOE QE Total 325B 325B

Bank of England (BOE) monetary policy committee members vote on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.The Bank of England electronically creates new money and uses it to purchase gilts from private investors such as pension funds and insurance companies. A higher than expected reading should be taken as negative/bearish for the GBP , while a lower than expected reading should be taken as positive/bullish for the GBP.

15:00 GBP NIESR GDP Estimate

The National Institute of Economic and Social Research (NIESR) gross domestic product (GDP) Estimate measures the change in the estimated value of all goods and services produced by the economy during the previous three months. The NIESR estimates GDP data on a monthly basis in an effort to predict the quarterly government-released data.

Government Bond Auctions (this week)

Apr 04 14:30 Sweden Details T-bill auction on Apr 11

Apr 05 08:50 France OAT auction

Apr 05 15:00 US Announces auctions

Apr 05 15:30 Italy Details BOT on Apr 11 & BTP/CCTeu on Apr 12

Originally posted here