Fundamental
Overview
The main culprit for the US
Dollar strength lately has been the rally in long term Treasury yields. The
yield curve has been bear-flattening which is what you would expect with higher
growth and potentially higher inflation expectations.
There’s a good argument
that the markets have been already positioning for a Trump’s victory which is
expected to strengthen the higher growth and less rate cuts expectations.
As previously mentioned, this
is the trend for now and it’s generally a bad idea to fight such trends without
a strong catalyst. The US Dollar will likely remain supported unless Harris
wins the US elections and we get a correction in Treasury yields.
USDCHF Technical
Analysis – Daily Timeframe
USDCHF Daily
On the daily chart, we can
see that USDCHF is approaching a key resistance zone around the 0.8730 level where
we can also find the trendline for confluence.
That’s where we can expect
the sellers to step in with a defined risk above the trendline to position for
a drop into the 0.8333 level. The buyers, on the other hand, will look for a
break higher to increase the bullish bets into the 0.89 handle next.
USDCHF Technical
Analysis – 4 hour Timeframe
USDCHF 4 hour
On the 4 hour chart, we can
see that that the price has been making almost textbooks higher highs and
higher lows with the price retesting the previous resistance
turned support before making a new high. Right now, the price is testing
the 0.8668 level.
The buyers will want to see
the price breaking higher to extend the rally into the 0.87 handle, while the
sellers will look for a break below the 0.8641 level to target a drop into the
0.86 handle next.
USDCHF Technical
Analysis – 1 hour Timeframe
USDCHF 1 hour
On the 1 hour chart, we can
see that we have a very noisy price action between the 0.8668 and 0.8641 levels.
We will likely need a breakout to see a more sustained trend but for now the
market participants might keep on playing the range by buying at support
and selling at resistance. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US Job Openings and the US Consumer Confidence report.
Tomorrow, we get the US ADP and the US GDP. On Thursday, we have the US PCE,
the US Jobless Claims and the US Employment Cost Index data. Finally, on
Friday, we conclude the week with the Swiss CPI, the US NFP and the US ISM
Manufacturing PMI.