Last week, the Fed hiked by 25 bps as
widely expected and left everything unchanged. Fed Chair Powell in the press
conference just reaffirmed their data dependency and kept all the options on
the table. The economic data since the FOMC meeting has been supporting the
soft-landing narrative as the labour market data remained strong and the
inflation data missed expectations.
On the other hand, the SNB
raised interest rates by 25 bps as expected at the last meeting and
communicated that additional rate hikes cannot be ruled out as it maintains the
hawkish stance. The Swiss CPI today showed the inflation rate
easing even more within the SNB 0-2% target band and should translate into a
pause for the SNB at the next meeting, barring any upside surprise before the
meeting.
USDCHF Technical Analysis –
Daily Timeframe
On the daily chart, we can see that since the double bottom on the
0.8555 level, USDCHF started a strong rally towards the 0.8858 resistance. We had
already 5 consecutive positive days and it looks like we will see more upside
as the US data remains strong and the crowded short USD positions get unwound.
The moving averages have
crossed to the upside which is another bullish signal for the pair. The target
for the buyers should be the downward trendline where we
can also find the 0.8858 support turned resistance and the
50% Fibonacci retracement level.
USDCHF Technical Analysis –
4-hour Timeframe
On the 4-hour chart, we can see that the price is
trending upwards within a rising channel and the red 21 moving average acts as
dynamic support. If we get a pullback, we should see the buyers stepping in at
the moving average and the lower bound of the channel to position for further
upside. The sellers, on the other hand, will want to see the price breaking
lower to give them more conviction and pile in for another low.
USDCHF Technical Analysis –
1-hour Timeframe
On the 1-hour chart, we can see that price
action within the channel has been diverging with
the MACD. This
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we may see a pullback into the 0.8761 resistance
turned support where we can also find the 50% Fibonacci retracement level. This
is where the buyers are likely to pile in with a defined risk below the channel
and target the 0.8858 resistance.
Upcoming Events
Today
the market will be focused on the US Jobless Claims and ISM Services PMI data,
while tomorrow all eyes will be on the US NFP report. Strong data should support
the US Dollar, while weak readings should weigh on the greenback in the
short-term.
This article was written by FL Contributors at www.forexlive.com. Source