USDCHF Technical Analysis – The US inflation data keeps markets guessing

Fundamental Overview

The USD has been marginally stronger in the past couple of days as despite a softer US CPI and US PPI reports, the components that feed into the Core PCE increased the Fed’s preferred price index. In fact, the Core PCE Y/Y is now projected at 2.7% vs. 2.6% prior, while the M/M measure is seen at 0.3% vs. 0.3% prior.

On the CHF side, the Swiss CPI released recently beat expectations with the Core measure remaining firm around 1.00% Y/Y. The market now expects just one last rate cut at the upcoming meeting.

USDCHF Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDCHF is currently pulling back from the lows reached at the peak of the risk-off sentiment that pushed the pair hundreds of pips lower in the past couple of weeks. From a risk management perspective, the sellers will have a better risk to reward around the 0.89 handle to position for further downside. The buyers, on the other hand, will look for upside breakout on the lower timeframes to keep pushing into new highs.

USDCHF Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have an upward trendline defining the current pullback. The buyers will likely continue to lean on the trendline to keep pushing into the major trendline. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 0.8727 level next.

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 around the minor trendline, while the sellers will look for a break lower to push into new lows. The red lines define the average daily range for today.

Upcoming Catalysts

Today we conclude the week with the University of Michigan Consumer Sentiment report.