Fundamental Overview
The USD remains strong across the board following the hawkish turn from Fed Chair Powell last week. The repricing in interest rate expectations acted as a tailwind for the greenback as Treasury yields rose and continue to trade at the recent highs.
Yesterday, we got a slightly weaker than expected ISM Manufacturing PMI report. Businesses continue to blame the tariff policy. Maybe the October US-China trade war weighed a bit on sentiment, so we will see if next month’s report shows the same downbeat mood.
On the CHF side, nothing has changed. The SNB left interest rates steady and kept everything unchanged at the last meeting. SNB’s members continue to repeat that the bar for negative rates is high, and Chairman Shlegel recently said that he expects inflation to rise slightly in the next quarters. Yesterday, we got a soft Swiss CPI report which weighed on the CHF, but it didn’t change anything for the SNB.
USDCHF Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCHF is breaking above the key 0.8073 level. This is where we can expect the buyers to increase the bullish bets into the 0.8171 level next. The sellers, on the other hand, will want to see the price falling back below the 0.8073 level to pile in for a drop back into the 0.7872 level next.
USDCHF Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong support zone around the 0.7980 level where we can also find an upward trendline for confluence. Of course, we will need some bad US data to get there as the buyers for now remain in control on the hawkish Fed repricing.
If we do get there, we can expect the buyers to step in around the support with a defined risk below the trendline to position for a rally into new highs. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the 0.7872 level next.
USDCHF Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor upward trendline defining the bullish momentum on this timeframe. The buyers will likely continue to lean on the trendline to keep pushing into new highs, while the sellers will look for a break lower to target a pullback into the 0.7980 support. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we have the US ADP report and the US ISM Services PMI. On Friday, we conclude the week with the US University of Michigan Consumer Sentiment report.
