Home USD/CHF: Trading Swiss Retail Sales May 2012
Opinions

USD/CHF: Trading Swiss Retail Sales May 2012

Swiss  Retail Sales is considered one of the most important indicator of consumer spending. The indicator’s release  early this  month provides analysts and traders with  an early  look at consumer spending. A reading that is higher than the market forecast is bearish for the US dollar.

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

Published on Wednesday at  7:15 GMT.

 Indicator Background

Consumer spending is one of the most important components of the economy, and strong numbers in this sector signify growth and a stronger economy.

The  April reading was a major disappointment, as the indicator posted a modest increase of 0.8%, far below the market  forecast of a  3.2% rise.   The  markets are  looking for some improvement in May,  with a prediction of 1.2%.

Sentiments and levels

USD/CHF has been drifting in recent trading, unable to sustain a breakout in either direction. The swissie did not take a cue from the euro, which showed some robust movement last week, particularly after the Fed announcment of no change in policy or rates. We could well see more choppiness from the pair, unless some economic releases out of the US or Switzerland catch the markets by surprise. So, the overall sentiment is  neutral on USD/CHF towards this release.

Technical levels, from top to bottom: 0.9204, 0.9156, 0.91, 0.9002, 0.8924 and 0.8850.

5 Scenarios

  1. Within expectations: 0.8% to 1.6%: In such a case, the  Swiss franc  is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 1.7% to 2.1%: In this scenario we could see USD/CHF drop below one support level.
  3. Well above expectations: Above 2.1%: Such an outcome could push the pair downwards, and a second  support level  might be broken as a result.
  4. Below expectations: 0.3% to 0.7%: A negative reading could push USD/CHF  above one line of resistance.
  5. Well below expectations: Below 0.3%: In this scenario, the  pair would likely  climb, and could break two or more resistance lines.

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

Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.