Fundamental
Overview
The USD has come under
strong pressure recently as the weaker US data finally triggered a deeper
pullback in the greenback from the stretched long positions accumulated in the
past two quarters. The market pricing switched pretty fast from expecting just
one cut a couple of weeks ago to three now.
The main event this week is
the US CPI report. Higher than expected data will likely give the greenback a
boost in the short term as markets pare back their rate cuts expectations.
Conversely, a soft report could see more weakness for the US Dollar ahead of
the FOMC decision next week.
On the CHF side, the Swiss CPI released last week beat
expectations with the Core measure remaining firm around 1.00% Y/Y. The market
now expects just one last rate cut at the upcoming meeting.
USDCHF
Technical Analysis – Daily Timeframe
USDCHF Daily
On the daily chart, we can
see that USDCHF sold off pretty heavily on the risk-off sentiment and the
weaker US Dollar. The pair is now getting close to the key swing level at
0.8730. That’s where we can expect the buyers to step in with a defined risk
below the level to position for a rally back into the 0.89 handle. The sellers,
on the other hand, will want to see the price breaking lower to increase the
bearish bets into new lows.
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 current bearish momentum.
From a risk management perspective, the sellers will have a better risk to
reward setup around the trendline to position for further downside.
The buyers, on the other hand, will want to see the price breaking higher to
pile in for a rally into the 0.89 handle next.
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 sellers will look for a rejection around
the trendline, while the buyers will look for a break to push into new highs. The
red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the NYFed Consumer Inflation
Expectations. Tomorrow, we get the US Job Openings data. On Wednesday, we have
the US CPI report. On Thursday, we get the US PPI data and the US Jobless
Claims figures. On Friday, we conclude the week with the University of Michigan
Consumer Sentiment report.