USDCHF Technical Analysis | Forexlive

The US data continued to
surprise to the upside since the last FOMC meeting and that lead the market to
price in a more hawkish path for interest rates as the Fed members and
especially Fed Chair Powell reiterated that they expect two or more rate hikes this
year if the economy remains strong. A lot will depend of course on the next NFP
and CPI reports, but as long as the data shows strength, the Fed should remain
hawkish, and the USD should appreciate.

Conversely, the SNB raised
interest rates by 25 bps as expected at the last meeting and communicated that
additional rate hikes cannot be ruled out. The Swiss CPI data this week showed the inflation
rate returning back within the SNB target band and should mean that the SNB can
pause at the next meeting and see how things develop.

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the USDCHF
started to range between the 0.89 and 0.90 levels although the bias remains
bearish as the moving averages are
crossed to the downside and the sellers are leaning on the red 21 moving
average to target the 0.8858 support. It’s
more about the data now as we are getting closer to the end of the tightening
cycle for many central banks. Naturally, a break above the red 21 moving
average should be a bad omen for the sellers as the buyers may get even more
conviction for a rally into the 0.9122 resistance.

USDCHF Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see more clearly the
rangebound price action between the 0.89 and 0.90 levels. We can also notice
that the price has been printing higher lows trying to break above the 0.90
resistance, so this should be a signal that the buyers have more strength and
that we may see a breakout to the upside soon.

USDCHF Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that at the
moment there’s really nothing to do here other than waiting for a breakout on
either side. Rangebound markets chop out many traders because patience is key
in such environments. A break to the upside should lead to a rally into the
0.9122 resistance, while a break to the downside, should open the door for a
new lower low into the 0.86 handle.

Upcoming Events

In the next days we’ll get many top tier economic
indicators like the US Jobless
Claims and ISM Services PMI tomorrow and the main event of the week: the US NFP
on Friday. Again, strong data should make the USD appreciate, while weak
readings should weaken the greenback.