18.07.201908:57 Forex Analysis & Reviews: Analysis of NZD/CHF for July 18, 2019: NZD to rise breaking CHF barrier?

The New Zealand dollar has managed to regain certain momentum against the Swiss franc recently which lead the price above 0.6625 area with a daily close. New Zealand has recently published upbeat economic reports, so NZD has every chance of extending gains against CHF in the coming days.

The quarterly CPI report of New Zealand was published this week, showing an increase to 0.6% from 0.1% due to higher prices for petrol and rent. On the other hand, the producer price index of Switzerland decreased to -0.5% from 0.0% which was against the expectation of 0.1%. The decline is mainly due to the lower prices for petroleum products, petroleum, and natural gas as well as basic metals and semi-finished metal products. The RBNZ reduced the interest rate to a record low of 1.5%, opting not to catch up with RBA's 1.25%. However, the bank kept the door open for easing in August. The RNBZ pointed out that the risks related to trading activity strengthened but the downside risks remained unchanged to the employment and inflation outlook. The RBNZ is expected to converge with the RBA over time, depending on the incoming data.

Tomorrow, New Zealand's Credit Card Spending report is going to be published which is expected to increase from the previous value of 6.6%.

On the other hand, the Swiss economy has printed solid economic statistics. The SNB has a plan of a rate cut if the FX interventions fail to dampen the upward pressure on CHF. The inflation target of the SNB is 0.7% on a yearly basis which is 0.1% up from last quarter's projection. The price level of the whole range of domestic and imported products fell by 1.4%, compared with June 2018. The unemployment rate was above the expectation of 2.4% but remained unchanged with the previous value of 2.3%. At the end of June 2019, 97,222 unemployed were registered at the regional employment agencies (RAV). Today, the trade balance report is going to be published which is expected to decrease from 3.41B to 3.21B.

As of the current scenario, CHF is having bearish expectations while NZD is expected to regain momentum in the coming day thanks to better-than-expected economic reports from New Zealand. Though the price has been impulsive with the recent bullish run, certain correction may be observed if CHF manages to pull back certain positive outcomes.

TECHNICAL OVERVIEW:

The price has managed to retest the 0.6625 area after breaking it recently with a daily close. It indicates further upward pressure is in the making. The dynamic level of 20 EMA has been carrying the price since it bounced off the 0.6500 area and as the price remains above 0.6625 area with a daily close, the it is expected to move higher towards 0.6725 and later towards 0.6800 resistance area in the coming days.