Fundamental
Overview
The USD has been relatively
stronger against most major currencies since Friday as the markets went into
risk-off following some bad US data release. In fact, we got a weak US Flash Services PMI and soon after the long-term inflation expectations in the Final UMich Consumer
Sentiment survey jumped to a new 30-year high.
The risk-off sentiment
picked up after the jump in the long-term inflation expectations. The market
might be fearing that in case we get a slowdown, the Fed might not be fast
enough in cutting rates amid inflation remaining above target and uncomfortably
high long-term inflation expectations.
This is something to keep
in mind in light of the next NFP and CPI reports coming out before the March
FOMC decision where we will also get the updated SEP and Dot Plot.
On the CHF side, nothing
has changed fundamentally with the market expecting a 25 bps cut in March and a
total of 35 bps of easing by year-end.
USDCHF
Technical Analysis – Daily Timeframe
USDCHF Daily
On the daily chart, we can
see that USDCHF is trading at the key 0.8960 support zone. This is where we can expect the buyers
to step in with a defined risk below the support to position for a rally into
the 0.92 handle. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish bets into the 0.87 handle next.
USDCHF Technical
Analysis – 4 hour Timeframe
USDCHF 4 hour
On the 4 hour chart, we can
see that we have a downward trendline defining the bearish momentum. The
sellers will likely continue to lean on it to keep pushing into new lows, while
the buyers will look for a break higher to increase the bullish bets into new
highs.
USDCHF Technical
Analysis – 1 hour Timeframe
USDCHF 1 hour
On the 1 hour chart, there’s
not much else we can add here as the buyers will continue to step in around the
support, while the sellers will look for a break lower. The red lines define the
average daily range for today.
Upcoming
Catalysts
Today we have the US Consumer Confidence
report. On Thursday, we get the latest US Jobless Claims figures, while on
Friday we conclude the week with the US PCE data.