USDCHF Technical Analysis | Forexlive
On the daily chart below for
USDCHF, we can see that after bottoming out at the 0.8858 support, the pair started to rally towards
the 0.90 resistance as several better-than-expected US economic data made the
market to rethink about the future interest rates path.
The first reaction to the Fed’s
hint to a pause in June was bearish the US Dollar, but the Fed has also left a
door open for another hike in case the data remained strong.
In fact, the US data since the
last FOMC meeting kept on beating forecasts beginning with a hot NFP report and
continuing with a big jump in long term consumer inflation expectations, beats
in retail sales, jobless claims and strong Services
PMIs yesterday.
This may keep core inflation
higher for longer and force the Fed to do more. We can see that USD/CHF is now
threatening a breakout of the trendline and the 0.90 handle, and the moving
averages have crossed to the upside. All else being equal, we may see USD/CHF at
the 0.91 handle next.
On the 4 hour chart below, we can
see that the price has been respecting the upward trendline perfectly as we got
bounces every time USD/CHF came there. The first breakout of the downward
trendline and 0.90 resistance failed, but now the buyers may have the upper
hand and take USD/CHF to the next resistance at 0.9118. The next data to watch is the US Jobless Claims report
tomorrow and the US PCE on Friday. Beats to the forecasts should add more fuel
to the USD/CHF rally.
On the 1 hour chart below, we can
see that the price is struggling a bit above the 0.90 resistance as the market
is caught between good US data and US debt ceiling headlines. On one hand, good
data is strengthening the Dollar, but on the other hand negative news on the
debt ceiling talks and the possibility of a US default weigh on the greenback.
Overall, the market expects that
the debt ceiling will be raised eventually, so the negative news on that front
are taken more as opportunities to buy the dips in USD/CHF.
Nonetheless, there’s still a risk
and the technicals should help navigate the flows here. On the upside, a break
above the swing high at 0.9030 should see the buyers piling in and target the
0.9118 resistance. On the downside, only a break below the upward trendline
would give the sellers conviction to target the 0.8858 low.