Basic overview
The USD continues to consolidate around the high levels except against commodity currencies where it extended to new highs. Last week's US inflation data was disappointing again although the data that feeds into the Core PCE overall was mixed as forecasters of the expected to increase 0.13% M / M.
Despite this, Treasury yields continue to rise and are now back around their post-US election highs. There is some understandable uneasiness in the bond market with the hot US data and the Fed continuing to cut into an accelerating economy.
On the CHF side, the SNB cut interest rates by 50 bps bringing the policy rate to 0.50% and dropped the language indicating further cuts in the coming quarters.
This suggests that the central bank may slow down the pace of easing which the market was already expecting with two 25 bps rate cuts for next year.
The Chairman of the SNB Schlegel was a little more cautious about the policy of negative rates but he did not exclude it from their strategy if it is necessary to stop appreciation in the Swiss Franc.
USDCHF Technical Analysis – Daily Chart
USDCHF per day
On the daily chart, we can see that USDCHF reversed the fall and rallied back above the key line of motion leaving behind a fakeout. The buyers are back in control and will continue to target the 0.9050 level. On the other hand, the sellers will want to see the price break below the trendline to start targeting new levels.
USDCHF Technical Analysis – 4 Hour Timeframe
USDCHF 4 hours
On the 4 hour chart, we can see that we have another small trend line that defines the current bullish trend in this time frame. It is likely that the buyers will continue to hold on to a marked risk below to set up for new highs, while the sellers will look for a break below to enter for an opportunity to break below the key. move and expand to new levels.
USDCHF Technical Analysis – 1 hour timeframe
USDCHF 1 hour
On the 1 hour chart, we can see that we have a small front line defining the current pullback. More aggressive buyers are likely to pile in on a break to target new highs, while sellers should continue to target the break below the main trend line. The red lines define the average daily range for today.
Catalysts to come
TodayWe have US Flash PMIs. Tomorrow, we get the US Sales data. On Wednesday, we have the FOMC Policy Decision. On Thursday, we will get the latest US jobless claims numbers. On Friday, we finish the week with US PCE data.
