USDCHF Technical Analysis – The CHF remains supported amid general risk-off

Fundamental Overview

The USD has come under strong pressure recently as the weaker US data finally triggered a deeper pullback in the greenback from the stretched long positions accumulated in the past two quarters. The market pricing switched pretty fast from expecting just one cut a couple of weeks ago to three now.

The main event this week is the US CPI report. Higher than expected data will likely give the greenback a boost in the short term as markets pare back their rate cuts expectations. Conversely, a soft report could see more weakness for the US Dollar ahead of the FOMC decision next week.

On the CHF side, the Swiss CPI released last week 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 sold off pretty heavily on the risk-off sentiment and the weaker US Dollar. The pair is now getting close to the key swing level at 0.8730. That’s where we can expect the buyers to step in with a defined risk below the level to position for a rally back into the 0.89 handle. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.

USDCHF Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a downward trendline defining the current bearish momentum. From a risk management perspective, the sellers will have a better risk to reward setup around the trendline to position for further downside. The buyers, on the other hand, will want to see the price breaking higher to pile in for a rally into the 0.89 handle next.

USDCHF Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much else we can add here as the sellers will look for a rejection around the trendline, while the buyers will look for a break to push into new highs. The red lines define the average daily range for today.

Upcoming Catalysts

Today we have the NYFed Consumer Inflation Expectations. Tomorrow, we get the US Job Openings data. On Wednesday, we have the US CPI report. On Thursday, we get the US PPI data and the US Jobless Claims figures. On Friday, we conclude the week with the University of Michigan Consumer Sentiment report.