USDCHF Technical Analysis – Jobless claims and CPI could change expectations again
Fundamental Overview
The USD sold off across the board on Friday following a softer than expected NFP report. Overall, the data wasn’t as bad as one might think by just looking at the reaction but given that we were positioned for a strong report and the pricing got more hawkish after the Fed’s decision, the weaker data was enough to trigger a quick repricing.
In fact, the market at some point was pricing 60 bps of easing by year-end compared to just 35 bps before the NFP release. That’s a pretty quick change of heart. Over the weekend, we also got Fed’s Williams opening the door for a cut in September and Fed’s Daly on Monday echoed the same sentiment. The NFP clearly made them a bit more worried, and a September cut seems now a done deal.
It’s highly likely that more benign data will see Fed Chair Powell opening the door for a cut in September at the Jackson Hole Symposium. Nonetheless, the ISM Services PMI yesterday showed a new high in the prices index which could keep traders on edge heading into the US CPI next week. Tomorrow, we get the US Jobless Claims and good data might trigger a rethink on the actual softness of the labour market.
On the CHF side, we haven’t got anything new in terms of monetary policy as the SNB is now in a long pause. The latest Swiss CPI showed a slight improvement in inflation although it’s not important as the central bank will not hike rates for a long time. The market doesn’t expect the SNB to cut anymore. There’s some focus at the moment on the 35% tariffs that the US slapped on Switzerland. That is likely to be resolved in the near future with the rate being set between 10-20% as we’ve seen for most other countries.
USDCHF Technical Analysis – Daily Timeframe
USDCHF Daily
On the daily chart, we can see that USDCHF is trading above the key resistance zone and the major trendline. The buyers will likely continue to step in around these levels with a defined risk below the recent lows to position for a rally into the 0.83 handle next. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the 0.79 handle.
USDCHF Technical Analysis – 4 hour Timeframe
USDCHF 4 hour
On the 4 hour chart, we can see that the price bounced from a minor upward trendline following the NFP-induced selloff. The buyers will likely continue to lean on the trendline to keep pushing into new highs, while the sellers will look for a break lower to increase the bearish bets into new lows.
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 likely continue to pile in around these levels to position for a rally into the 0.83 handle, while the sellers will want to see the price falling below the key levels to increase the bearish bets into new lows. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we get the latest US Jobless Claims figures. This article was written by Giuseppe Dellamotta at investinglive.com.