USDCHF Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as
  expected with basically no change to the statement. The Dot Plot still showed
  three rate cuts for 2024 and the economic projections were upgraded with growth
  and inflation higher and the unemployment rate lower.
• Fed Chair Powell
  maintained a neutral stance as he said that it was premature to react to the
  recent inflation data given possible bumps on the way to their 2% target.
• The US CPI and
  the US PPI beat
  expectations for the second consecutive month.
• The US Jobless Claims beat
  expectations across the board.
• The latest US Manufacturing
  PMI
  beat expectations while the Services PMI missed slightly. Both the measures
  remain in expansion though.
• The US Consumer
  Confidence missed expectations although the labour
  market details improved.
• The market expects the first rate cut in June.

CHF

• The SNB cut interest rates by 25 bps bringing the policy rate
  to 1.50% vs. 1.75% prior.
• The latest Switzerland CPI beat expectations slightly although
  the Core measure eased further.
• 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 central bank will likely cut
  interest rates again in June if inflation continues to fall.

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCHF broke
the key 0.8886 resistance
following the SNB rate cut and extended the rally as the US data continued to
surprise to the upside. From a risk management perspective, the buyers will
have a much better risk to reward setup around the trendline where
they will also find the confluence of the
red 21 moving average and the
previous resistance turned support. Such a
big pullback is not in sight yet though as we will need weak US data to make it
happen.

USDCHF Technical Analysis –
4-hour Timeframe

On the 4-hour chart, we can see that we have the
38.2% Fibonacci retracement level
right around the most recent swing low level at 0.8965. This is another good
spot for the buyers to step in with a defined risk below the Fibonacci level in
case the price pulls back. The sellers, on the other hand, will want to see the
price breaking below the Fibonacci level to position for a drop into the
trendline.

USDCHF Technical Analysis –
1-hour Timeframe

On the 1-hour chart, we can see that the
latest leg higher diverged with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we have two possible supports for a pullback. The
first one is around the 0.9015 level where we have the most recent swing high
and the 38.2% Fibonacci retracement level of the latest leg higher. If the
price were to break below this support, the sellers will target the next one
around the 0.8965.

Upcoming Events

Today we have Fed’s Waller speaking where the market
will want to see if he sounds hawkish after the recent economic data. Tomorrow,
we get the latest US Jobless Claims figures, while on Friday we conclude with
the US PCE and Fed Chair Powell.