Fundamental Overview
The US Dollar continues to consolidate around the highs as the market reached the peak in the repricing of interest rates expectations and it will need stronger reasons to price out the remaining rate cuts for 2025.
This was signalled by the lack of US Dollar strength after lots of strong US data with the market’s pricing remaining largely unchanged around three rate cuts by the end of 2025. We might see the greenback remaining on the backfoot at least until the US CPI due next week.
Yesterday, Fed’s Waller and Fed’s Williams sounded like a rate cut in December is basically a done deal with the plan to slow the pace of rate cuts considerably in 2025. We will likely need another hot CPI report to force them to skip the December cut.
On the CHF side, the Switzerland CPI came in line with expectations today. The market continues to price in a 72% chance of a 25 bps cut in December and a total of 70 bps of easing by the end of 2025.
USDCHF Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCHF continues to display a rangebound price action around the highs. We have an upward trendline defining the bullish momentum on this timeframe. We can expect the buyers to lean on the trendline with a defined risk below it to position for a rally into the 0.9050 level next. The sellers, on the other hand, will want to see the price breaking below the trendline to start targeting new lows.
USDCHF Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a nice support zone around the 0.88 handle where the price got rejected from several times in the past weeks. This adds confluence to the trendline and should give the buyers more conviction to step in around those levels. The sellers, on the other hand, will look for a break lower to gain control and target a fall into the 0.87 handle.
USDCHF Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we might have created a tighter range between the 0.8885 and the 0.8850 levels. The buyers will want to see the price breaking to the upside to increase the bullish bets into the 0.9050 level next. The sellers will look for a break below the bottom of the range to target a drop into the 0.88 support zone. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we get the US Job Openings data. Tomorrow, we have the US ADP, the US ISM Services PMI and Fed Chair Powell speaking. On Thursday, we get the latest US Jobless Claims figures. Finally, on Friday, we conclude the week with the US NFP report.
