Fundamental
Overview
The US Dollar fell across
the board in the final part of last week for two main reasons. The US PPI report came in higher than expected but the
focus was on the details that feed into the Core PCE index, which is what the
Fed focuses on. Those details were all very soft and helped to bring the early
estimates down to more benign levels. In fact, the Core PCE Y/Y is now
projected to fall to 2.6% vs. 2.8% in the prior month. That’s good news for the
Fed.
Eventually, the bearish
momentum increased substantially as the Trump’s tariffs saga came to an end. In
fact, the US President announced his reciprocal tariffs that could go into effect in April
but the overall tone of it wasn’t aggressive and sounded a lot like the start
of a negotiating process to bring tariffs to a fair level for everyone.
On the CHF side, the Swiss
CPI last week came in line with expectations although the core measure increased.
It didn’t change much for the SNB, but the market scaled back the expectations
for potential negative rates which boosted the Swiss Franc.
USDCHF
Technical Analysis – Daily Timeframe
USDCHF Daily
On the daily chart, we can
see that USDCHF broke below the major trendline and bounced around the 0.8960
support
zone. The buyers stepped in there with a defined risk below the support to
position for a rally back 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, there’s
not much we can glean from this timeframe as the price is trading in the middle
of the broken trendline and the key support zone. If we go get a pullback into
the trendline, we can expect the sellers to pile in around those levels to
position for the break below the support, while the buyers will look for a
break above the trendline to increase the bullish bets into the 0.92 handle
next.
USDCHF Technical
Analysis – 1 hour Timeframe
USDCHF 1 hour
On the 1 hour chart, on an
intraday basis, we might see the sellers lean on the most recent lower low to
push into the key support, while the buyers will look for a break higher to extend
the pullback into he trendline. The red lines define the average daily range for today.
Upcoming
Catalysts
This week is pretty empty on the data front
with the most important releases scheduled for the latter part of the week. On
Thursday, we get the latest US Jobless Claims figures, while on Friday we
conclude with the US Flash PMIs.