USD/CHF weekly outlook

Negative Interest Rate

According to Reuters, SNB was not happy about the negative interest rate of – 0.75% it charges the banks who park money with it overnight. The SNB has no alternative to ultra-expansive monetary policy, while the virus crisis has created a great appreciation pressure on safe Francs, SNB Chair Thomas Jordan said in an interview session with the SonntagsZeitung newspaper.

The -0.75% SNB negative interest rate is the lowest interest rate in the world at the moment, after the BOJ -0.10%. The Franc has become its main attraction as a safe asset with a stable political climate and has not changed much. The SNB has taken this route while maintaining negative interest rates to avoid more difficult circumstances. The SNB also increased foreign currency purchases to reduce Franc increases. Deposits in the central bank, that are seen as a proxy for SNB intervention, have increased by almost 77 billion francs this year, while the CHF has risen to the highest level against the EUR, since July 2015.

USD/CHF

Last week’s USDCHF bounced, but was confined under Resistance as well as the 0.9800 round number. Bias still looks neutral for this week in a fairly wide sideways range of 200 pips. Breaking the 0.9680 minor Support will turn the bias to the downside with next Support at 0.9588 and the low price of 0.9500. A break of 0.9800 will target testing at the price of 0.9900.

In the daily period, higher prices are being formed that are lower than before and the impression from price projections is narrower in the formation of triangle patterns. The 200-DMA has become a dynamic Resistance that has been retested 3 times, while the RSI is at the 50 center line and MACD’s histogram line up above the neutral level of the MACD.

In the 4-hour period, the 0.9800 area implies a stronger Resistance level than the lower Support level. However the MA’s slope in the middle of the consolidation zone occurred for the past 7 weeks. More indications to the negative side at 4-hour chart, with RSI entering a downward bias at 44 and MACD histogram approaching 0 zone.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.