Fundamental Overview
The Swiss Franc lost some more ground against the USD last Thursday as the US Jobless Claims figures came out better than expected. That helped ease the fears around the US labour market triggered by the weak NFP report and improved the risk sentiment.
The market has been slowly paring back the aggressive rate cuts expectations for the Fed as now a 25 bps cut in September is seen as more likely with a total of 98 bps of easing by year-end. On the SNB side, the market is fully pricing a 25 bps cut in September and a total of 46 bps of easing by year-end.
USDCHF Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCHF almost erased the entire drop from the weak US NFP report and it’s getting close to the key 0.8730 resistance. That’s where we can expect the sellers to step in with a defined risk above the level to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.
USDCHF Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum. The buyers will likely continue to lean on the trendline to position for new highs, while the sellers will look for a breakout to the downside to pile in and position for new lows.
USDCHF Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the pair bottomed out on Monday at the peak of the risk-off sentiment and eventually increased the gains following the US Jobless Claims report. There’s not much else we can glean from this timeframe as the market participants will likely wait for a catalyst or the price to reach the key levels. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we get the US PPI data. On Wednesday, we have the US CPI report. On Thursday, we get the US Retail Sales and Jobless Claims figures. Finally, on Friday, we conclude the week with the University of Michigan Consumer Sentiment survey.
