Fundamental
Overview
The USD got a bit of a
boost on Monday following the better than expected US PMIs although the gains were not widespread. We’ve
also seen some bids in the greenback yesterday following the weak US Consumer Confidence where inflation expectations jumped
to yet another high.
Overall, the market is
still pricing between two to three rate cuts this year and the sentiment
remains tentative as we approach the Trump’s “Liberation Day” on April 2nd.
On the CHF side, as a
reminder, the SNB cut interest rates by 25 bps as expected bringing the
policy rate to 0.25%. There was no signal of the end of the easing cycle, but
the central bank is now in a good position to just pause for a long time with
no need to go back to ZIRP or even NIRP. The market doesn’t see any more rate
cuts.
The focus is now on next Wednesday when the US will unveil the tariffs plan and we can then move forward from there without the high uncertainty that is prevailing at the moment.
USDCHF
Technical Analysis – 4 hour Timeframe
USDCHF 4 hour
On the 4 hour chart, we can
see that USDCHF remains stuck in a 100-pips range between the 0.8760 support and the 0.8860 resistance. The sellers will
likely step in around the resistance and the trendline
to position for a drop into new lows, while the buyers will want to see the
price breaking higher to gain more conviction and push into the 0.90 handle
next.
USDCHF Technical
Analysis – 1 hour Timeframe
USDCHF 1 hour
On the 1 hour chart, we can
see that we have an even smaller range on this timeframe with support around the 0.88 handle. Market participants will likely continue to play this range until we get a breakout on either side but waiting for April 2nd would be a better idea given the uncertainty and the potential for surprises. The red
lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we get the latest US Jobless Claims
figures, while on Friday we conclude the week with the Canadian GDP and the US
PCE report.
