USD/CHF Fundamental Analysis Jan. 20, 2012, Forecast

Economic Events:

15:00 USD Existing Home Sales 4.65M 4.42M

Existing Home Sales measures the change in the annualized number of existing residential buildings that were sold during the previous month. This report helps to gauge the strength of the U.S. housing market and is a key indicator of overall economic strength.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

Analysis and Recommendations:

Support and Resistance levels for tomorrows at     
S:       0.9333   0.9391   0.9441
R:       0.9549   0.9607   0.9657

The USD/CHF trading at 0.9334

Data released earlier this week showed that the ZEW index of Swiss economic expectations climbed to -50.1 in January, giving a boost to the Franc. There is nothing on the calendar for the CHF for the remainder of the week.

Data in from the US showed jobless claims dropped to the lowest level in almost four years, while consumer prices remained flat for a 2nd month. Housing starts data came in weaker than expected showing that the construction sector despite some improved confidence still has a way to go  yet. Even though, market reports were saying there would be an increase in housing starts, until the foreclosure glut is absorbed housing starts will remain low.

Other positive signs for the US labor market was the drop in jobless claims falling by a larger than expected figure falling to 352K, the lowest since 2008. This follows a sharp increase in claims the previous week to above the 400K level.

We should see the USD stablize and continue to build strength. This is a bearish environment and we might see this as a sell opportunity.

Upcoming Govt Bond Sales Dates

Jan 23  10:10  Norway  Nok 6.0bn 4.25% May 2017 bond

Jan 23  10:10  Slovakia  Auctions Apr 2014 bond

Jan 23  10:30  Germany  Eur 3.0bn Jan 2013 Bubill

Jan 23  12:00  Norway  Details bond auction on Jan 30

Jan 24  09:30  Netherlands Eur 1.5-2.5bn Jan 2013 & Jan 2042 DSL

Jan 24  09:30  Spain  Auctions 3 & 6M T-bills

Jan 24  16:30  Italy   Details CTZ/BTPei on Jan 26 & BOT on Jan 27 &

Jan 24  18:00  US  Auctions 2Y Notes

Jan 25  10:10  Sweden  Nominal bond auction

Jan 25  10:30  Germany  Eur 3.0bn 3.25% Jul 2042 Bund

Jan 25  16:30  Italy   Details BTP/CCTeu on Jan 30

Jan 25  18:00  US  Auctions 5Y Notes

Jan 26  10:10  Italy   Auctions CTZ/BTPei

Jan 26  18:00  US  Auctions 7Y Notes

Jan 27  10:10  Italy   BOT auction

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