Getting ready for the ride....

Here's what I'm gonna focus on when the market opened for this week.

The Swiss franc was one of the top decliners in last friday volatile day. However, with the swissie-based pairs coming up on support across the board and both ECB (Europe Central Bank)and SNB (Swiss National Bank) looking for further rate hike, I think big levels should hold.

Technical picture of EUR/CHF pair shows a head 'n shoulder formation on the daily chart. Resistance is seen on the shoulder that lines up with 62 fib level at 1.6537. Support is found on the neckline of the pattern at 1.6420.



Here's what I will do. If the right shoulder holds up, I'll open a short hedge positions targeting 1.6450 and if price penetrate through that level, I will go for a long hedge positions without definite target. I will just close the long positions when the indicators told me so.

Euro Zone - The economic calendar for the Euro-zone will be spreads over the course of the next week following Wednesday's ECB decision. Next Thursday's event risk should draw the most attention though, as inflation data for the month of May will hit the tape. Both headline and core Euro-zone CPI are anticipated to hold at a lofty 1.9 percent - just below the ECB's 2 percent ceiling - but a surprise jump above the upper limit could leave FX traders in a frenzy to price in another rate hike. The following day, markets will look towards the Euro-zone Trade Balance which should show a surplus once again. However, the release is not typically market moving and isn't likely to do so this time around either.

Switzerland - The major piece of fundamental risk this week comes next Thursday, when the Swiss National Bank will announce their decision adjustment to the 3-month Labor target rate. While the central bank is widely expected to hike rates, the decision isn't likely to do much for the Swiss franc in the long-term, as the carry trade will likely continue to work against the currency. However, the Swissie may see a brief, sharp gain upon the announcement of rate normalization as such policy action is undoubtedly bullish. The other piece of scheduled news comes on Friday. While Adjusted Retail Sales are estimated to ease back in April, this volatile indicator does not tend to be much of a market mover, so traders may find it more advantageous to keep an eye on broad carry trade trends as well as USDCHF price action.