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
- 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.
- Above expectations: 1.7% to 2.1%: In this scenario we could see USD/CHF drop below one support level.
- 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.
- Below expectations: 0.3% to 0.7%: A negative reading could push USD/CHF above one line of resistance.
- 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/CHF.