USD

  • The Fed left interest rates unchanged as expected 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.
  • Fed Chair Powell maintained a neutral stance as he said that it was premature to react to the recent inflation data given possible bumps on the way to their 2% target.
  • The US CPI and the US PPI beat expectations for the second consecutive month.
  • The US Jobless Claims beat expectations across the board.
  • The latest US Manufacturing PMI beat expectations while the Services PMI missed slightly. Both the measures remain in expansion though.
  • The US Consumer Confidence missed expectations although the labour market details improved.
  • The market expects the first rate cut in June.

CHF

  • The SNB cut interest rates by 25 bps bringing the policy rate to 1.50% vs. 1.75% prior.
  • The latest Switzerland CPI beat expectations slightly although the Core measure eased further.
  • The Unemployment Rate remains steady at cycle lows.
  • The Manufacturing PMI rose slightly although it remains in contraction, while the Services PMI hold on in expansion.
  • The central bank will likely cut interest rates again in June if inflation continues to fall.

USDCHF Technical Analysis – Daily Timeframe

USDCHF Technical Analysis
USDCHF Daily

On the daily chart, we can see that USDCHF broke the key 0.8886 resistance following the SNB rate cut and extended the rally as the US data continued to surprise to the upside. 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 confluence of the red 21 moving average and the previous resistance turned support. Such a big pullback is not in sight yet though as we will need weak US data to make it happen.

USDCHF Technical Analysis – 4-hour Timeframe

USDCHF Technical Analysis
USDCHF 4 hour

On the 4-hour chart, we can see that we have the 38.2% Fibonacci retracement level right around the most recent swing low level at 0.8965. This is another good spot for the buyers to step in with a defined risk below the Fibonacci level in case the price pulls back. The sellers, on the other hand, will want to see the price breaking below the Fibonacci level to position for a drop into the trendline.

USDCHF Technical Analysis – 1-hour Timeframe

USDCHF Technical Analysis
USDCHF 1 hour

On the 1-hour chart, we can see that the latest leg higher diverged with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we have two possible supports for a pullback. The first one is around the 0.9015 level where we have the most recent swing high and the 38.2% Fibonacci retracement level of the latest leg higher. If the price were to break below this support, the sellers will target the next one around the 0.8965.

Upcoming Events

Today we have Fed’s Waller speaking where the market will want to see if he sounds hawkish after the recent economic data. Tomorrow, we get the latest US Jobless Claims figures, while on Friday we conclude with the US PCE and Fed Chair Powell.