USD
- The Fed left interest rates unchanged as expected at the last meeting with a shift in the statement that indicated the end of the tightening cycle.
- The US GDP beat expectations by a big margin.
- The US PCE came mostly in line with expectations and the Core 3-month and 6-month annualised rates are now below the Fed’s 2% target.
- The US Job Openings surprised to the upside although the hiring and quit rates remain below pre-pandemic levels.
- The latest US PMIs beat expectations by a big margin for both the Manufacturing and Services measures.
- The US Retail Sales beat expectations across the board.
- The US Consumer Confidence report came in line with expectations but the labour market details improved considerably.
- The Fed members recently have been pushing back on the aggressive rate cuts expectations.
- The market now expects the first rate cut in May.
CHF
- The SNB kept interest rates unchanged at 1.75% at the last meeting stating that they will adjust policy if necessary to ensure that inflation remains in the target range.
- The SNB Governor Jordan said that the monetary conditions are appropriate and that they do not forecast any further tightening.
- The latest Switzerland CPI beat expectations although the rate remains within the SNB’s target band.
- The Unemployment Rate remains steady at cycle lows.
- The Manufacturing PMI rose slightly although it remains in contraction, while the Services PMI hold on in expansion.
- The market expects the SNB to start cutting rates in Q2.
USDCHF Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCHF broke below the trendline and consolidated around the red 21 moving average as the buyers continue to pile in supported by strong US data. There’s not much more to glean from this timeframe so we need to zoom in to see more details.
USDCHF Technical Analysis – 4-hour Timeframe
On the 4-hour chart, we can see that the recent price action formed what looks like a descending triangle. The price can break on either side of the pattern but what follows next is generally a sustained move in the direction of the breakout. The sellers will likely lean on the top trendline to position for a breakout to the downside and increase the bearish bets as soon as the price breaks out. The buyers, on the other hand, will likely lean on the support to position for a breakout to the upside and increase the bullish bets as soon as the price breaks out.
USDCHF Technical Analysis – 1-hour Timeframe
On the 1-hour chart, we can see more closely the consolidation inside the triangle. There’s not much more one can do here other than waiting for the planned setups to work out.
Upcoming Events
Today we have the Switzerland Retail Sales, the US Employment Cost Index and the ADP data before the FOMC rate decision. Tomorrow, we have the Switzerland Manufacturing PMI, the US Jobless Claims and the ISM Manufacturing PMI. On Friday, we conclude the week with the US NFP report.
