Fundamental Overview
The USD weakened across the board in the first part of the week but managed to erase all the losses yesterday with an incredible rally. We haven’t got any catalyst for the move but there was no reason for the weakness at the start of the week either.
Fed speakers this week haven’t offered anything new and just reiterated that the labour market weakness “forced” them to move towards neutral. This means that if we were to get stronger labour market data, the Fed could start to turn more hawkish again and we might not get another cut in October or December.
Looking ahead, we have the US Jobless Claims report today and good data will likely give the greenback another boost. Weak data, on the other hand, could lead to a pullback. The biggest event will be the NFP report next Friday.
On the CHF side, the SNB today left interest rates steady and kept everything mostly unchanged. SNB’s President Schlegel didn’t offer any forward guidance but he did say that the bar to cut rates further is very high and negative inflation prints in the short-term won’t be enough.
The last Swiss inflation prints rebounded a bit but there’s a long way to go before breaching their 2% inflation limit. So, this leaves the CHF trading mostly based on the strength and weakness of other currencies.
USDCHF Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCHF made a new 2025 low on the Fed’s decision but eventually erased all the losses and rallied into the 0.7970 level. The buyers remain in control for now and they will likely keep targeting the major downward trendline near the 0.80 handle. The sellers, on the other hand, will likely lean on the trendline with a defined risk above it to position for a drop back into the lows.
USDCHF Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong resistance zone near the 0.80 handle where we have also the confluence of the major trendline. That’s going to be a tough nut to crack for the buyers but a breakout should open the door for a rally into the 0.82 handle 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 extend the pullback into the 0.7937 level. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US jobless claims figures, while tomorrow we conclude the week with the US PCE report.
