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Can the euro and franc sustain their risk-off gains for another week?

Yet another round of low to mid-tier releases is on tap, and here’s what market watchers are expecting.

Mid-tier euro zone data

  • Euro zone PPI (Aug. 4, 9:00 am GMT) to print 0.6% rebound after earlier 0.6% dip
  • Euro zone retail sales (Aug. 5, 9:00 am GMT) likely increased 6.5% in June after previous 17.8% gain
  • German factory orders (Aug. 6, 6:00 am GMT) probably rose by 11% in June
  • German industrial production (Aug. 7, 6:00 am GMT) to post 8.3% gain after earlier 7.8% increase

Low-tier Swiss data

  • Swiss CPI (Aug. 3, 6:30 am GMT) to show 0.4% dip in price levels for July
  • Manufacturing PMI (Aug. 3, 7:30 am GMT) to climb from 41.9 to 50.0
  • SECO consumer climate index (Aug. 4, 5:45 pm GMT) to improve from earlier -39 figure
  • SNB foreign currency reserves (Aug. 7, 7:00 am GMT) to increase from earlier 850 billion CHF and reflect some central bank intervention

Overall market sentiment

  • Risk-off flows tend to benefit the lower-yielding euro and franc, especially while the U.S. dollar is under downside pressure
  • There is still a lot of market focus on second wave COVID-19 fears as another round of lockdown measures could prompt a flight to safety
  • Rallying gold prices are also in focus, but traders seem wary of buying up the positively-correlated franc due to SNB intervention threats

Technical snapshot

  • Stochastic suggests that most euro pairs are still looking bearish in the overbought territory
EUR Forex Pairs Stochastic from MarketMilk
EUR Forex Pairs Stochastic from MarketMilk
  • Only EUR/CHF and EUR/GBP are on neutral grounds
  • As for franc pairs, the same oscillator is painting a mixed picture
CHF Forex Pairs Stochastic from MarketMilk
CHF Forex Pairs Stochastic from MarketMilk
  • In particular, NZD/CHF, USD/CHF, AUD/CHF and CAD/CHF are all oversold
  • CHF/JPY and GBP/CHF are looking bearish in the overbought region

Missed last week’s price action? Read EUR & CHF’s price recap for July 24 – 31!