Fundamental Overview
The bullish momentum in the US Dollar seems to be waning despite the recent higher-than-expected US CPI and PPI reports. One caveat is that the market has now priced out the aggressive rate cuts expectations and it’s almost perfectly in line with the Fed’s projections.
Therefore, we will likely need more strong US data to see the market pricing in an earlier pause in the Fed’s easing cycle and give the US Dollar a further boost.
In the bigger picture, it looks like the US long term yields are bound to rise further, which should keep the recent uptrend in the USD intact, but more bullish catalysts for the greenback would give more conviction for the buyers.
The next big risk events will be in November when we get the October data and the US election.
USDCHF Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCHF reached a new high yesterday as the USD got bid across the board although without a catalyst. The resistance around the 0.8730 level remains the main target for the buyers. The sellers will want to see the price falling back below the 0.8550 level to pile in for a drop into the 0.8333 level next.
USDCHF Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have an upward trendline defining the current bullish momentum. The buyers will likely keep on leaning on it to position for further upside. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 0.8333 level.
USDCHF Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can that the price is consolidating just above recent resistance turned support around the 0.86 handle. The buyers will likely step in here with a defined risk below the support to position for a rally into new highs, while the sellers will look for a downside break to position for a drop into the trendline. The red lines define the average daily range for today.
Upcoming Catalysts
This week is pretty empty on the data front with just a couple of key economic releases. On Thursday, we get the US Retail Sales and US Jobless Claims data.