AUD/CHF Price Likely to Go Down amid Declining Australian Building Approvals

Switzerland – KOF Economic Barometer

Today, at GMT 8:00 a.m., the KOF Economic Research Agency will release its economic barometer index, which measures the changes in the level of a composite index.

Since the KOF develops this composite index by analyzing 219 different economic indicators, binary options investors consider this to be an important fundamental indicator regarding the Swiss economy.

In January, the KOF economic barometer index reading came out at 100.3 and the forecast for February is currently set at a slightly lower reading, at 99.1.

Australia – Building Approvals

On Tuesday, at GMT 12:30 a.m., the Australian Bureau of Statistics will release the national month-over-month building approvals figure, which measures the changes in the number of approvals of new buildings.

Since a build permit indicates new construction work, it suggests that there would be additional positive economic activities. For example, new jobs would be created for construction workers. Therefore, binary options traders consider this data regarding new building approvals to be a leading indicator of the overall economic health of the country.

Last month, the building approvals figure went up by 9.2% and the forecast for this month is currently set at a decrease of 2.9%.

Trade Recommendation for the AUD/CHF

AUD/CHF has remained in a range bound market condition since the start of 2016. Last week, the AUD/CHF price once again found strong resistance near the top end of the range, around 0.7230 and later closed below the important pivot zone around the 0.7100 level.

If the AUD/CHF penetrates and closes below the minor support around 0.7065, it would likely resume the downtrend.

As the Australian building approvals figure is expected to decline by 2.9% this month, it would likely put additional bearish pressure on the AUD/CHF price. Hence, the fundamental outlook for the pair would remain bearish, at least in the beginning of the week.

Under such circumstances, it is recommended that traders consider placing a PUT order for the AUD/CHF with their binary options brokers once the price closes below the 0.7065 level.

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and write on various tech and financial topics. You can reach him at [email protected]
Asif Imtiaz

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