EUR/CHF Forecast Dec. 20, 2011, Fundamental Analysis

The EUR/CHF started the week with a clam move in a very tight range as the pair continues to lack momentum especially after the SNB defied called for another move to weaken the franc.

The pair is trading within a very tight range with a slight bias favoring the franc still on unwinding of expectations for sudden SNB movement soon. The market was focused on Monday on the death of North Korean leader Kim Jong-il as haven demand in the Asian session was strong on the dollar and also affected the market on fear of worsening political status in the Korean Peninsula.

We still expect tight ranged trading to dominate the coming two weeks with thinning trading volumes with the end of the year and on Tuesday any comments from the EU finance ministers after their conference call that was scheduled for Monday on discussing the pledged IMF aid will surely have some effect on the market.

At 07:00 GMT, the Swiss economy will release its most important data for the week which is trade data for Nov. with exports and imports during the month. The trade surplus is predicted to narrow to 2.00 billion Swiss francs from the prior surplus of 2.15 billion francs.

Germany will release the Gfk Consumer Confidence Survey for January at 07:00 GMT which is expected to slow slightly to 5.5 from 5.6.

Also at 07:00 GMT we have the Producer Price Index from Germany which is expected with 0.1% gain in November after 0.2% and on the year to ease to 5.2% after 5.3%.

At 09:00 GMT we have the IFO survey for December were the Business Climate index is expected to fall to 106.0 from 106.6, the Current Assessment index to fall to 116.0 from 116.7 and the Expectations index to fall to 97.0 from 97.3.