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 and
  the US PPI beat
  expectations for the second consecutive month.
• The NFP report beat
  expectations on the headline number, but the unemployment rate and the average
  hourly earnings missed notably. Moreover, the US Jobless Claims beat
  expectations across the board with a big positive revision to Continuing
  Claims.
• 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 Retail Sales missed
  expectations across the board although the data improved from the prior month.
• The market sees basically a 50/50 chance of a hike
  in June now.

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.
• There’s basically a 50/50 chance
  that the SNB cuts rates in March.

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCHF bounced
on the key support around
the 0.8728 level and rallied all the way back to the resistance at 0.8886. This
is where we can expect the sellers to step in with a defined risk above the
level to position for another drop into the support. The buyers, on the other
hand, will want to see the price breaking higher to increase the bullish bets
into the 0.9111 level.

USDCHF Technical Analysis –
4-hour Timeframe

On the 4-hour chart, we can see that we have a trendline defining
the current uptrend where we can also find the confluence of the red 21 moving average and the
38.2% Fibonacci retracement level.
If we were to get a pullback, we can expect the buyers to lean on the trendline
with a defined risk below it to position for a break above the resistance with
a better risk to reward setup. The sellers, on the other hand, will want to see
the price breaking lower to invalidate the bullish setup and increase the
bearish bets into the support.

USDCHF Technical Analysis –
1-hour Timeframe

On the 1-hour chart, we can see that the
latest leg higher is diverging with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it might be a signal for a pullback into the trendline
where the buyers will look for a bounce and a rally into new highs. Conversely,
if the price were to break lower, we would get a confirmation for a reversal
and the sellers will gain even more conviction for new lows.

Upcoming Events

Today we have the FOMC rate decision on the agenda
where the central bank is expected to keep rates unchanged. Tomorrow, we have
the SNB rate decision where there’s basically a 50/50 chance of a rate cut.
Later that day we will also get the latest US PMIs and Jobless Claims figures.

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