USDCHF Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as expected with a shift in the statement that
  indicated the end of the tightening cycle.
• The Summary of Economic Projections showed a
  downward revision to Growth and Core PCE in 2024 while the Unemployment Rate
  was left unchanged. Moreover, the Dot Plot was revised to show three rate cuts
  in 2024 compared to just two in the last projection.
• Fed Chair Powell didn’t push back against the strong dovish pricing
  and even said that they are focused on not making the mistake of holding rates
  high for too long, which implies a rate cut coming soon.
• The US CPI last week came in line with expectations
  with the disinflationary progress continuing steady. This was also confirmed by
  the US PPI the day after where the data missed
  estimates.
• The labour market has been showing signs of
  weakening lately but we got some strong releases recently with the US Jobless Claims and the NFP coming
  in strongly.
• The US Retail Sales last week beat expectations across the board as
  consumer spending continues to hold.
• The latest ISM Manufacturing PMI missed expectations falling further into
  contraction, while the ISM Services PMI beat forecasts holding on in expansion.
• The market expects the Fed to start cutting rates
  in Q1 2024.

CHF

• The SNB kept interest rates unchanged at 1.75% stating that they will
  adjust policy if necessary to ensure that inflation remains in the target range.
• The SNB Governor Jordan said that the monetary conditions
  are appropriate and that they do not forecast any further tightening.
• The recent Switzerland CPI missed expectations by a big margin
  with the inflation rate remaining in the SNB’s target band.
• The Unemployment Rate remains steady at cycle lows.
• The Manufacturing PMI recently slightly beat expectations
  reaming in contraction, while the Services PMI hold on in expansion.
• The market expects the SNB to start
  cutting rates in Q3 2024.

USDCHF Technical Analysis –
Daily Timeframe

On the
daily chart, we can see that USDCHF recently sold off following the
surprisingly dovish FOMC decision and it’s now close to the cycle lows around
the 0.8555 level. We can expect the buyers to start stepping in around the lows
to target a rally into the trendline, while
the sellers will likely want to take advantage of such opportunity to short
again at better prices and target a new cycle low.

USDCHF Technical Analysis –
4-hour Timeframe

On the 4-hour chart, we can see that we have a
minor trendline where the sellers might want to lean on as they will also find
the confluence with the
previous swing low and the red 21 moving average. A break
above the trendline, on the other hand, should see the buyers increasing their
bullish bets into the major trendline.

USDCHF Technical Analysis –
1-hour Timeframe

On the 1-hour chart, we can see more
closely the current price action and we can notice that we have also the 38.2% Fibonacci
retracement level around the resistance zone
defined by the minor trendline and the swing low level. What happens here will
likely decide where the pair go next as a rejection should lead to a drop into
the 0.8555 level, while a break to the upside should trigger a rally into the
major trendline around the 0.88 handle.

Upcoming Events

This week is a bit empty on the data front as we head
into the Christmas holidays. Today, we have the US Consumer Confidence report. Tomorrow,
we get the latest US Jobless Claims data, while on Friday we conclude the week
with the US PCE report.