Fundamental
Overview
The USD continues to remain
under pressure against most major currencies despite higher Core PCE estimates
following the US CPI and PPI reports, and a better-than-expected Retail Sales data on Monday.
The market pricing for the
Fed went from expecting more than 80 bps of easing by year-end at the peak of
the risk-off sentiment to roughly 59 bps as of now. That didn’t provide a
pullback in the US Dollar selloff though. The focus now switched to the FOMC
decision due later today where the Fed is expected to keep rates steady.
On the CHF side, the Swiss CPI released recently beat expectations
with the Core measure remaining firm around 1.00% Y/Y. Moreover, the German
fiscal stimulus is expected to boost the European and Swiss economies. The SNB
might be less inclined to cut rates further now although the market prices a 76%
chance of one last cut at tomorrow’s decision.
USDCHF
Technical Analysis – Daily Timeframe
USDCHF Daily
On the daily chart, we can
see that USDCHF seems to have resumed the downtrend. From a risk management
perspective though, the sellers will have a better risk to reward setup around
the trendline to position for the break below the
0.8727 level. The buyers, on the other hand, will want to see the price
breaking higher to start targeting the 0.90 handle next.
USDCHF Technical
Analysis – 4 hour Timeframe
USDCHF 4 hour
On the 4 hour chart, we can
see that we had a minor upward trendline defining the pullback. As the price
broke below the trendline, the sellers piled in to position for a drop into the
0.8727 level next. There’s no level where the buyers can lean onto here other
than waiting for a potential drop into the 0.8727 level to buy the dip with a
defined risk below the level and target the major trendline next.
USDCHF Technical
Analysis – 1 hour Timeframe
USDCHF 1 hour
On the 1 hour chart, we can
see that we have a minor downward trendline defining the bearish momentum on
this timeframe. The sellers will likely continue to lean on the trendline to
keep pushing into new lows, while the buyers will look for a break higher to
start targeting a pullback into the major trendline. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the FOMC Policy Decision. Tomorrow,
we have the SNB Policy Decision and the US Jobless Claims data.
