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.
• The US CPI beat expectations for the third
  consecutive month, while the US PPI came in line with forecasts.
• The US NFP beat expectations across the board
  although the average hourly earnings came in line with forecasts.
• The US PMIs missed expectations in April with the
  commentary citing lower inflationary pressures but also increased layoffs.
• The US Retail Sales beat expectations across the board by a
  big margin with positive revisions to the prior figures.
• The market expects the first rate cut in
  September.

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 around 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.

USDCHF Technical
Analysis – 4-hour Timeframe

On the 4-hour chart, we can see more clearly the
rangebound price action that has been going on for almost a month. The reason
for this is that the market has already priced in the cuts for the SNB and the
less dovish path for US interest rates. That means that we need a catalyst to
change future expectations in some way. For now, the market will likely keep on
bouncing between the 0.9075 support and the 0.9150 resistance until we get a
breakout.

USDCHF Technical
Analysis – 1-hour Timeframe

On the 1-hour chart, we can see more
closely the range with just one spike below it caused by the Israeli
retaliation against Iran last Friday, which was faded as the market sniffed the
de-escalation. So, we are back in trading inside the range with the market
participants continuing to sell around the resistance and buy around the
support.

Upcoming Events

Tomorrow we will see the latest US Jobless Claims
figures, while on Friday we conclude the week with the US PCE report.

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