USDCHF Technical Analysis | Forexlive

USD

The Fed left interest rates unchanged as
expected at the last meeting while dropping the tightening bias in the
statement but adding a slight pushback against a March rate cut.
Fed Chair Powell stressed
that they want to see more evidence of inflation falling back to target and
that a rate cut in March is not their base case.
The US CPI beat
expectations for the second consecutive month with the disinflationary trend
reversing.
The US PPI beat
expectations across the board by a big margin.
The US Initial Claims beat
expectations while Continuing Claims missed. Overall, the data remains steady.
The ISM Manufacturing
PMI
surprised to the upside with the new orders index, which is considered a
leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat
expectations across the board with the employment sub-index erasing the prior
drop and prices paid jumping above 60.
The US Retail Sales missed
expectations across the board by a big margin.
The market now expects the first rate cut in June.

CHF

The SNB kept interest rates unchanged at 1.75% at the last meeting stating
that they will adjust policy if necessary to ensure that inflation remains in
the target range.
The SNB Governor Jordan continues to be optimistic about
inflation expecting it to remain below 2% this year.
The latest Switzerland CPI missed expectations across the
board by a big margin.
The Unemployment Rate remains steady at cycle lows.
The Manufacturing PMI rose slightly although it remains
in contraction, while the Services PMI hold on in expansion.
The market expects the SNB to cut
rates in March.

USDCHF Technical Analysis –
Daily Timeframe

USDCHF Daily

On the daily chart, we can see that USDCHF broke
through the 0.8820 level following a cool Swiss CPI report and a hot US CPI
release. This has increased the policy divergence between the two central banks
with the market bringing forward rate cuts for the SNB and pushing the Fed’s
cuts backword. Despite this development, the pair struggled to extend the rally
as the USD came under pressure across the board. From a risk management
perspective, the buyers will have a much better risk to reward setup around the
upward trendline where
they will also find the confluence with the
previous swing high level, the red 21 moving average and the
50% Fibonacci retracement level.

USDCHF Technical Analysis –
4-hour Timeframe

USDCHF 4 hour

On the 4-hour chart, we can see that the price has
been consolidating recently between the 0.8784 support and the
0.8840 resistance marked by the green box. This gives us two possible
scenarios:

A break to the upside should see the buyers piling
in to position for a rally into new highs.
A break to the downside is likely to see the
sellers increasing the bearish bets into the upward trendline, eventually
targeting a break below it.

USDCHF Technical Analysis –
1-hour Timeframe

USDCHF 1 hour

On the 1-hour chart, we can see more
closely the recent price action inside the green box. There’s not much to do
here other than waiting for a clear breakout although traders could also “play
the range” by buying at support and selling at resistance.