USD

  • The Fed left interest rates unchanged as expected at the last meeting 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.
  • The US CPI beat expectations for the third consecutive month, while the US PPI came in line with forecasts.
  • The US NFP beat expectations across the board although the average hourly earnings came in line with forecasts.
  • The US PMIs missed expectations in April with the commentary citing lower inflationary pressures but also increased layoffs.
  • The US Retail Sales beat expectations across the board by a big margin with positive revisions to the prior figures.
  • The market expects the first rate cut in September.

CHF

  • The SNB cut interest rates by 25 bps bringing the policy rate to 1.50% vs. 1.75% prior.
  • The latest Switzerland CPI missed expectations by a big margin.
  • The Unemployment Rate remains steady at cycle lows.
  • The Manufacturing PMI improved further while the Services PMI saw a big drop. Both the measures are in contraction.
  • The market expects the SNB to cut rates again in June.

USDCHF Technical Analysis – Daily Timeframe

USDCHF Technical Analysis
USDCHF Daily

On the daily chart, we can see that USDCHF has been consolidating around the key resistance at 0.9112. 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 red 21 moving average and the 38.2% Fibonacci retracement level for confluence. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and increase the bearish bets into new lows.

USDCHF Technical Analysis – 4-hour Timeframe

USDCHF Technical Analysis
USDCHF 4 hour

On the 4-hour chart, we can see more clearly the rangebound price action that has been going on for almost a month. The reason for this is that the market has already priced in the cuts for the SNB and the less dovish path for US interest rates. That means that we need a catalyst to change future expectations in some way. For now, the market will likely keep on bouncing between the 0.9075 support and the 0.9150 resistance until we get a breakout.

USDCHF Technical Analysis – 1-hour Timeframe

USDCHF Technical Analysis
USDCHF 1 hour

On the 1-hour chart, we can see more closely the range with just one spike below it caused by the Israeli retaliation against Iran last Friday, which was faded as the market sniffed the de-escalation. So, we are back in trading inside the range with the market participants continuing to sell around the resistance and buy around the support.

Upcoming Events

Tomorrow we will see the latest US Jobless Claims figures, while on Friday we conclude the week with the US PCE report.