USDCHF Technical Analysis – FOMC and SNB decisions in the spotlight

Fundamental Overview

The USD continues to remain under pressure against most major currencies despite higher Core PCE estimates following the US CPI and PPI reports, and a better-than-expected Retail Sales data on Monday.

The market pricing for the Fed went from expecting more than 80 bps of easing by year-end at the peak of the risk-off sentiment to roughly 59 bps as of now. That didn’t provide a pullback in the US Dollar selloff though. The focus now switched to the FOMC decision due later today where the Fed is expected to keep rates steady.

On the CHF side, the Swiss CPI released recently beat expectations with the Core measure remaining firm around 1.00% Y/Y. Moreover, the German fiscal stimulus is expected to boost the European and Swiss economies. The SNB might be less inclined to cut rates further now although the market prices a 76% chance of one last cut at tomorrow’s decision.

USDCHF Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDCHF seems to have resumed the downtrend. From a risk management perspective though, the sellers will have a better risk to reward setup around the trendline to position for the break below the 0.8727 level. The buyers, on the other hand, will want to see the price breaking higher to start targeting the 0.90 handle next.

USDCHF Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we had a minor upward trendline defining the pullback. As the price broke below the trendline, the sellers piled in to position for a drop into the 0.8727 level next. There’s no level where the buyers can lean onto here other than waiting for a potential drop into the 0.8727 level to buy the dip with a defined risk below the level and target the major trendline next.

USDCHF Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor downward trendline defining the bearish momentum on this timeframe. The sellers will likely continue to lean on the trendline to keep pushing into new lows, while the buyers will look for a break higher to start targeting a pullback into the major trendline. The red lines define the average daily range for today.

Upcoming Catalysts

Today we have the FOMC Policy Decision. Tomorrow, we have the SNB Policy Decision and the US Jobless Claims data.