Basic overview
The USD gained from the FOMC decision as the market saw it as more hawkish than expected. Overall, apart from a few tweaks, the Fed was in line with market prices. Regardless, the market responded in a big way pushing Treasury yields higher and giving the USD some relief.
The data is the most important thing now because it will decide what the Fed is going to do. They turned their focus to inflation again, so it will likely only take one soft CPI report in January to see the market react in a negative way sending Treasury yields and the US Dollar more lower
On the CHF side, the SNB
interest rates cut 50 bps bringing the policy rate to 0.50% and easing the language signaling further cuts in the coming quarters. This suggests that the central bank may slow down the pace of tapering which the market was already expecting with two 25 bps rate cuts for next year.
USDCHF Technical Analysis – Daily Chart
USDCHF per day
On the daily chart, we can see that USDCHF extended the rally into the 0.90 handle after the FOMC decision but eventually erased most of the gains. From a risk management perspective, customers will have a better risk to reward position around the line of motion. The sellers, on the other hand, want to see the price break lower to increase the bearish bets into the 0.87 handle next.
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 position for new highs, while the sellers will look for a break below to enter for a pullback. -into the main transit line.
USDCHF Technical Analysis – 1 hour timeframe
USDCHF 1 hour
On the 1 hour chart, we can see that we have a small resistance line defining the current pullback into the small trend line. The buyers will want to see the price break above the resistance line to increase the bullish bets to the 0.9050 level, while the sellers will likely continue to position for a break below the minor trend line and focus on the main trend. The red lines define the average daily range for today.
Catalysts to come
Todaywe finish the week with US PCE data.
