USD/CHF: Trading the Swiss Industrial Production

The  Swiss Industrial Index measures change in production in the  manufacturing,  utilities  and mining sectors. A reading that is higher than the market forecast is bullish for the Swiss franc.

Here are all the details, and 5 possible outcomes for USD/CHF.

Published on Tuesday at  8:15 GMT.

Indicator Background

Swiss Industrial Production, released quarterly, is an important leading economic indicator. It provides analysts and traders with a snapshot of the health of the Swiss economy. The indicator tends to be volatile, and often the market forecasts are well off the mark.

The indicator disappointed the markets in February, recording a 1.7% drop.  The markets had predicted a smaller decrease of 0.7%. The forecast for March calls  for a 0.4% increase. Will the indicator climb into positive territory this month?

Sentiments and levels

The US economy continues to do well, while the economic data coming out of Switzerland has been mostly weak. Since early March, USD/CHF has been moving upwards, and this could well continue after the speech by the head of the Fed. So, the overall sentiment is bullish on USD/CHF towards this release.

Technical levels, from top to bottom: 0.9306, 0.9250, 0.9204, 0.9120, 0.9050, 0.8924.

5 Scenarios

1. Within expectations: 0.1% to 0.7%: In such a case, the  franc is likely to rise within range, with a small chance of breaking higher.
2. Above expectations: 0.8% to 1.1%: An unexpected higher reading can send USD/CHF  below one  support line.
3. Well above expectations: Above 1.1%: The chances of such a scenario are very low.  The pair could  break two or more  support levels on such an outcome.
4. Below expectations:  -0.3%  to 0.0%: A  reading at the zero level or in negative territory  could push USD/CHF above one resistance line.
5. Well below expectations:  Below -0.3%: In this scenario, the pair could break two or more resistance  lines.

For more  on  the  Swiss franc, see the USD  to CHF  forecast.