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The U.K. is about to print its February labor market data!
Will the report help extend GBP/CHF’s short-term uptrend?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Over the weekend, China’s CPI showed a 0.7% y/y uptick in February. It marked the first increase since August and was helped by the Lunar New Year holidays boosting demand. The PPI report marked a faster decline at -2.7% y/y (from -2.5% y/y)
Japan avoids a technical recession as its Q4 GDP is revised higher from -0.1% q/q to 0.1% q/q, with an annual growth of 0.4% (from -0.4%)
Japan’s preliminary machine tool orders dropped by another 8.0% y/y in February after 14.0% y/y decline in January
Switzerland’s SECO consumer climate worsened a bit from -41 to -42 in February
Price Action News
Overlay of AUD vs. Major Currencies Chart by TradingView
Forex price action was pretty tight at the start of the week with not a lot of big catalysts on the docket. We did see some weakness in commodity-related currencies like AUD after the Asian markets took cues from the tech-led selloff in Wall Street last Friday. It also didn’t help that some traders are staying on the sidelines ahead of closely watched data releases like the U.S. CPI and PPI reports.
The Australian dollar is trading in the red against all of its major counterparts except for the British pound. AUD is seeing the heaviest losses against JPY and CHF while seeing the least losses against USD and NZD.
Upcoming Potential Catalysts on the Economic Calendar:
BOE MPC member Catherine Mann to give a speech in London at 5:00 pm GMT
Japan’s BSI manufacturing index at 11:50 pm GMT
Japan’s PPI (y/y) at 11:50 pm GMT
AU NAB business confidence at 12:30 am GMT (Mar 12)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
GBP/CHF 15-min Forex Chart by TradingView
A burst of strength from the Swiss franc earlier today took GBP/CHF from its 1.1280 March highs back down to its current levels closer to 1.1250.
As you can see, 1.1250 is not far from the S1 (1.1240) Pivot Point line, 200 SMA, and a trend line support that hasn’t been broken since late February.
How low can GBP/CHF go before the buyers step back in?
Tomorrow we’ll see the U.K.’s February labor market numbers. Word around is that we’ll see a slightly higher unemployment rate, fewer jobless claimants, and more net job additions compared to January.
More importantly, the three-month average wage growth, which the Bank of England (BOE) will likely pay closer attention to, may print higher and make the interest rate cut schedule more complicated for BOE Gov. Bailey and his team.
Faster wage growth would give the BOE more room to keep its interest rates higher for longer. GBP could draw in buyers including against CHF.
GBP/CHF may find support from the previous area of interest and revisit its March highs near 1.1280. If we get a risk-friendly trading environment, we may even see GBP/CHF hit the R1 (1.1300) Pivot Point line and psychological level!
