USD
- The Fed left interest rates unchanged as expected at the last meeting while dropping the tightening bias in the statement but adding a slight pushback against a March rate cut.
- The US CPI beat expectations for the second consecutive month with the disinflationary trend reversing.
- The US PPI beat expectations across the board by a big margin.
- The US Jobless Claims beat expectations with the data remaining steady.
- The latest US PMIs increased further from the prior month with the Manufacturing PMI beating expectations and the Services PMI missing.
- The US Consumer Confidence missed expectations across the board.
- The market now expects the first rate cut in June.
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 latest Switzerland CPI missed expectations across the board by a big margin.
- 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 cut rates in March.
USDCHF Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCHF has been consolidating around the 0.88 handle with the price recently spiking downwards and getting rejected right after. From a risk management perspective, the buyers have a great risk to reward setup at the key trendline where we can find the confluence with the previous swing high, the red 21 moving average and the 50% Fibonacci retracement level. The sellers will need the price to break below the trendline to invalidate the bullish setup and start targeting the 0.8555 level.
USDCHF Technical Analysis – 4-hour Timeframe
On the 4-hour chart, we can see that the price has been consolidating between the 0.8784 support and the 0.8840 resistance marked by the green box. If the price were to break again through the support, we can expect the sellers to extend the drop into the key trendline. Conversely, a break to the upside should lead to a rally into the 0.91 handle.
USDCHF Technical Analysis – 1-hour Timeframe
On the 1-hour chart, we can see more closely the recent price action inside the green box. There’s not much to do here other than waiting for a clear breakout although the traders could also “play the range” by buying at support and selling at resistance.
Upcoming Events
Tomorrow we will see the US PCE and the latest US Jobless Claims figures. On Friday, we conclude the week with the Switzerland Retail Sales and the US ISM Manufacturing PMI.
