CHF: Favoured currency to position for USD strength - Westpac

Sandeep Kanihama FXStreet Contributor

Research Team at Westpac, suggests that the CHF remains their favoured currency to position for USD strength, as their model, technical and macro scores summing to an aggressive -8, a strong cue to buy USD/CHF on weakness.

Key Quotes

“We lift our buy level in USD/CHF to 0.9990, stop 0.9890.”

“Macro: Disappointing export data and recent CPI data risking a slide back towards deflation will increase the perception, repeatedly iterated by SNB members, that current NIRP could be increased will add to official support for a softer CHF.”

“Technical: Inability to push through 1.01 may increase the potential for retracements, but slippage has been remarkably contained. A spike below 1.0040 could trigger retracements towards 0.9900, but this should provide the opportunity to reposition long USD for a push toward 1.0250-60.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD falls toward 1.1700 on broad USD recovery

EUR/USD turns south and declines toward 1.1700 on Wednesday. The US Dollar gathers recovery momentum and forces the pair to stay on the back foor, as traders look to USD short-covering ahead of US inflation report on Thursday. However, the downside could be capped by hawkish ECB expectations.

GBP/USD trades deep in red below 1.3350 after soft UK inflation data

GBP/USD stays under strong selling pressure midweek and trades below 1.3350. The UK annual headline and core CPI rose by 3.2% each, missing estimates of 3.5% and 3.4%, respectively, reaffirming dovish BoE expectations and smashing the Pound Sterling across the board ahead of Thurday's BoE policy announcements.

Gold clings to moderate daily gains above $4,300

Following Tuesday's volatile action, Gold regains its traction on Wednesday and trades in positive territory above $4,300. While the buildup in the USD recovery momentum caps XAU/USD's upside, the cautious market stance helps the pair hold its ground.