USDCHF Technical Analysis – The USD bounced back on new tariffs headlines

Fundamental
Overview

The USD has been stronger
since last Friday as Trump floated reciprocal tariffs. That came after a good US
NFP report where the data was mixed at best but still pointing to strength.
The jump in average hourly earnings caught the eye but that might have been
distorted by the drop in average weekly hours.

We’ve also got another jump
in inflation expectations in the University
of Michigan Consumer Sentiment survey showing that the tariffs news is the
main culprit of the recent surge in expectations.

The focus now switched to
the US CPI report tomorrow where Core inflation is expected to tick lower which
would be a welcome news. A lower than expected print should see the US Dollar
losing ground across the board once again, while a hot reading might boost the
greenback for the rest of the week.

On the CHF side, nothing
has changed for now. As a reminder, the SNB cut interest rates by 50 bps at the
last policy meeting bringing the policy rate to 0.50% and dropping the language
signalling further cuts in the coming quarters.

This suggests that the
central bank will likely slow the pace of easing which is something that the
market was already expecting with roughly two 25 bps cuts priced in for this
year. The recent Swiss CPI didn’t change much for the central
bank as the data came basically in line with expectations.

USDCHF
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCHF eventually bounced off of the major trendline and extended the rally into
the 0.91 handle. The buyers will continue to target the 0.92 handle next, while
the sellers will want to see the price breaking below the major trendline to gain
conviction and start targeting new lows.

USDCHF Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers will likely lean on it to keep pushing into new highs, while the
sellers will look for a break lower to position for a drop into the major
trendline.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the buyers will look for a bounce on the trendline,
while the sellers will look for a break lower. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the Fed Chair Powell
Testimony. Tomorrow, we get the US CPI report. On Thursday, we have the Swiss
CPI, the US PPI and the US Jobless Claims. On Friday, we conclude the week with
the US Retail Sales.

This article was written by Giuseppe Dellamotta at www.forexlive.com.