USD

  • The Fed left interest rates unchanged as expected at the last meeting and dropped the tightening bias in the statement.
  • The US CPI and the US PPI beat expectations for the second consecutive month.
  • The NFP report beat expectations on the headline number, but the unemployment rate and the average hourly earnings missed notably. Moreover, the US Jobless Claims beat expectations across the board with a big positive revision to Continuing Claims.
  • The latest US ISM Manufacturing PMI missed expectations by a big margin remaining in contraction with the US ISM Services PMI following suit but holding on in expansion.
  • The US Retail Sales missed expectations across the board although the data improved from the prior month.
  • The market sees basically a 50/50 chance of a hike in June now.

CHF

  • The SNB kept interest rates unchanged at 1.75% at the last meeting stating that they will adjust policy if necessary to ensure that inflation remains in the target range.
  • The latest Switzerland CPI beat expectations slightly although the Core measure eased further.
  • The Unemployment Rate remains steady at cycle lows.
  • The Manufacturing PMI rose slightly although it remains in contraction, while the Services PMI hold on in expansion.
  • There’s basically a 50/50 chance that the SNB cuts rates in March.

USDCHF Technical Analysis – Daily Timeframe

USDCHF Technical Analysis
USDCHF Daily

On the daily chart, we can see that USDCHF bounced on the key support around the 0.8728 level and rallied all the way back to the resistance at 0.8886. This is where we can expect the sellers to step in with a defined risk above the level to position for another drop into the support. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 0.9111 level.

USDCHF Technical Analysis – 4-hour Timeframe

USDCHF Technical Analysis
USDCHF 4 hour

On the 4-hour chart, we can see that we have a trendline defining the current uptrend where we can also find the confluence of the red 21 moving average and the 38.2% Fibonacci retracement level. If we were to get a pullback, we can expect the buyers to lean on the trendline with a defined risk below it to position for a break above the resistance with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and increase the bearish bets into the support.

USDCHF Technical Analysis – 1-hour Timeframe

USDCHF Technical Analysis
USDCHF 1 hour

On the 1-hour chart, we can see that the latest leg higher is diverging with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it might be a signal for a pullback into the trendline where the buyers will look for a bounce and a rally into new highs. Conversely, if the price were to break lower, we would get a confirmation for a reversal and the sellers will gain even more conviction for new lows.

Upcoming Events

Today we have the FOMC rate decision on the agenda where the central bank is expected to keep rates unchanged. Tomorrow, we have the SNB rate decision where there’s basically a 50/50 chance of a rate cut. Later that day we will also get the latest US PMIs and Jobless Claims figures.