USD

  • The Fed left interest rates unchanged as expected at the last meeting with basically no change to the statement. The Dot Plot still showed three rate cuts for 2024 and the economic projections were upgraded with growth and inflation higher and the unemployment rate lower.
  • The US CPI beat expectations for the third consecutive month, while the US PPI came in line with forecasts.
  • The US NFP beat expectations across the board although the average hourly earnings came in line with forecasts.
  • The US ISM Manufacturing PMI beat expectations by a big margin with the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to the lowest level in 4 years.
  • The US Retail Sales beat expectations across the board by a big margin with positive revisions to the prior figures.
  • The market now expects the first rate cut in September.

CHF

  • The SNB cut interest rates by 25 bps bringing the policy rate to 1.50% vs. 1.75% prior.
  • The latest Switzerland CPI missed expectations by a big margin.
  • The Unemployment Rate remains steady at cycle lows.
  • The Manufacturing PMI improved further while the Services PMI saw a big drop. Both the measures are in contraction.
  • The market expects the SNB to cut rates again in June.

USDCHF Technical Analysis – Daily Timeframe

USDCHF Technical Analysis
USDCHF Daily

On the daily chart, we can see that USDCHF has been consolidating around the key resistance at 0.9112. From a risk management perspective, the buyers will have a much better risk to reward setup around the trendline where they will also find the red 21 moving average and the 38.2% Fibonacci retracement level for confluence. 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 new lows.

USDCHF Technical Analysis – 4-hour Timeframe

USDCHF Technical Analysis
USDCHF 4 hour

On the 4-hour chart, we can see that the price has been diverging with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, the target for the pullback would stand right around the trendline and the 38.2% Fibonacci retracement level, but the price will first need to break below the 0.91 handle to confirm it.

USDCHF Technical Analysis – 1-hour Timeframe

USDCHF Technical Analysis
USDCHF 1 hour

On the 1-hour chart, we can see that the price has been ranging between the 0.91 support and the 0.9145 resistance. The buyers will want to see the price breaking higher to position for a rally into new highs, while the sellers will want to see the price breaking lower to target a drop into the 0.90 handle.

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