USDCHF Technical Analysis

USD

• The Fed left interest rates unchanged as
  expected at the last meeting and dropped the tightening bias in the statement.
• The US CPI
  yesterday beat expectations for the second consecutive month but it didn’t
  change the market’s pricing for rate cuts.
• The NFP report beat
  expectations on the headline number, but the unemployment rate and the average
  hourly earnings missed notably.
• The latest US ISM
  Manufacturing PMI missed expectations by a big margin
  remaining in contraction with the US ISM Services
  PMI
  following suit but holding on in expansion.
• The US Consumer
  Confidence missed expectations across the board.
• The market 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 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 market expects the SNB to cut
  rates in March.

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCHF recently
broke below the key upward trendline with the
moving averages crossing
over to the downside. This is generally a signal for a change of the trend, so
we can expect the sellers to look for short opportunities on pullbacks. A break
below the 0.8728 level would further confirm the resumption of the downtrend
with the sellers increasing the bearish bets into the 0.8555 level. The buyers,
on the other hand, will need to defend the 0.8728 level to avoid a complete
breakdown and keep targeting new highs.

USDCHF Technical Analysis –
4-hour Timeframe

On the 4-hour chart, we can see that the price pulled
back to retest the broken upward trendline and the sellers started to pile in
as they had the confluence with the
downward trendline and the 50% Fibonacci retracement level.
The buyers, on the other hand, will want to see the price breaking higher and
rise back above the upward trendline to invalidate the bearish setup and
position for a rally into new highs.

USDCHF Technical Analysis –
1-hour Timeframe

On the 1-hour chart, we can see more
closely the recent price action with some consolidation around the broken
trendline. The sellers should remain in control as long as the price stays
below the downward trendline. A break below the upward counter-trendline should
see the sellers increasing their bearish bets into new lows targeting a break
below the 0.8728 level. The buyers, on the other hand, will likely lean on the
upward counter-trendline and the 0.8728 level to position for a rally into new
highs with a better risk to reward setup.

Upcoming Events

Tomorrow we get the US PPI, the US Retail Sales and the
US Jobless Claims figures. On Friday, we conclude the week with the University
of Michigan Consumer Sentiment survey.

This article was written by FL Contributors at www.forexlive.com.