Fundamental
Overview
The USD got a boost yesterday
from strong US Consumer Confidence data which triggered an aggressive rise in Treasury
yields. The report however just showed that the labour market remains resilient
which is good news for growth and not necessarily bad news for inflation.
The CHF, on the other hand,
remains under pressure from the positive risk sentiment in the markets and the
rate cuts expectations from the SNB. There’s no real strong reason for the
Swiss Franc to rally at the moment, so the gains might come from a weak USD.
USDCHF
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that USDCHF bounced on the key 0.90 handle and extended the rally into the 0.9150
region as the US PMIs kept the greenback stronger against the Swiss Franc. The
sellers will need to see the price falling below the 0.90 handle to technically
reverse the bullish trend.
USDCHF Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that the price yesterday bounced on the support
zone around the 0.91 handle where we had also the 38.2% Fibonacci
retracement level for confluence.
The buyers piled in there supported by the strong US data.
A break above the 0.9157
level should see the buyers increasing the bullish bets into the 0.9250 level.
The sellers, on the other hand, will want to see the price falling below the
support to position for a drop into the 0.90 handle.
USDCHF Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have a resistance around the 0.9130 level where we can also find
the 61.8% Fibonacci retracement level for confluence. This is where the sellers
are leaning with a defined risk above the level to position for a break below
the 0.91 support with a better risk to reward setup. The buyers, on the other
hand, will want to see the price breaking higher to increase the bullish bets
into new highs.
Upcoming
Catalysts
Tomorrow we will see the Switzerland GDP and the latest US Jobless Claims
figures. On Friday, we have the Switzerland Retail Sales and Manufacturing PMI,
while later in the day we conclude with the US PCE report.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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