USDCHF Technical Analysis

USD

• The Fed left interest rates unchanged as expected at the last meeting 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 NFP beat expectations across the board
  although the average hourly earnings came in line with forecasts.
• The US ISM Manufacturing PMI beat expectations by a big margin with
  the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to
  the lowest level in 4 years.
• There’s now basically a 50/50 chance of a 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 missed expectations by a big
  margin.
• The Unemployment Rate remains steady at cycle lows.
• The Manufacturing PMI improved further while the Services
  PMI saw a big drop. Both the measures are in contraction.
• The market expects the SNB to cut
  rates again in June.

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCHF has been
consolidating near the key resistance at
0.9112. 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 red 21 moving average and the
38.2% Fibonacci retracement level for
confluence. 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 new lows with
the 0.8728 level as the first target.

USDCHF Technical Analysis –
4-hour Timeframe

On the 4-hour chart, we can see that the price has
been diverging with the
MACD as it
approached the key resistance at 0.9112. This is generally a sign of weakening
momentum often followed by pullbacks or reversals. In this case, the target for
the pullback would stand right around the trendline and the 38.2% Fibonacci
retracement level, but the price will first need to break below the 0.90 handle
to confirm it.

USDCHF Technical Analysis –
1-hour Timeframe

On the 1-hour chart, we can see that the
price has been consolidating between the 0.90 handle and the counter-trendline
around the 0.9070 level. The buyers will want to see the price breaking higher
to position for a rally into new highs, while the sellers will want to see the
price breaking lower to target new lows. Watch out for today’s US CPI release
as hot figures should trigger a strong rally, while cold data is likely to
cause a selloff into new lows.

Upcoming Events

Today we get the US CPI report and the FOMC Minutes.
Tomorrow, we will have the US PPI and the latest 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.