USD/CHF moves sideways below parity following last week's rally

Major European equity indexes rise on Monday on improved sentiment.
US Dollar Index waits for next catalyst above 98.
Focus stays on US-China trade headlines in the absence of significant data releases.

Eren Sengezer FXStreet

The USD/CHF pair gained nearly 100 pips last week supported by a broad USD recovery and positive rhetoric on the United States (US)-China trade dispute. Although the pair inched higher at the start of the week and touched its best level in more than a month at 0.9984, it seems to be having a tough time gathering momentum. As of writing, the pair was up 0.08% on a daily basis at 0.9980.

Trade optimism weighs on safe havens

Last Friday, US President Donald Trump said the trade deal with China was "potentially very close" to allow risk on flows to take control of the market action. Additionally, the IHS Markit's preliminary Manufacturing Purchasing Managers' Index (PMI) for November showed that the economic activity in the manufacturing sector is expected to expand at a more robust pace than it did in October and helped ease worries over a protracted weakness in the sector.

The US Dollar Index capitalized on the upbeat data and rose to fresh weekly top above the 98 handle to help the pair finish the week on a strong note.

At the start of the week, reports revealing that China has decided to raise penalties for theft of Intellectual Property (IP) provided a boost to the risk appetite as this attempt is seen as a move that would please the US. Reflecting the upbeat mood, major European equity indexes and the 10-year US Treasury bond yield are pushing higher on Monday.

In the second half of the week, the Federal Reserve Bank of Dallas' Manufacturing Index will be the only data featured in the US economic docket. Ahead of this data, the US Dollar Index is flat on the day near the 98.30 mark. Meanwhile, fresh developments on trade are likely to continue to impact the risk perception.

Technical levels to watch for

USD/CHF

Overview
Today last price	0.9981
Today Daily Change	0.0007
Today Daily Change %	0.07
Today daily open	0.9974

Trends
Daily SMA20	0.9915
Daily SMA50	0.9925
Daily SMA100	0.9884
Daily SMA200	0.9949

Levels
Previous Daily High	0.9981
Previous Daily Low	0.9926
Previous Weekly High	0.9981
Previous Weekly Low	0.9868
Previous Monthly High	1.0028
Previous Monthly Low	0.9837
Daily Fibonacci 38.2%	0.996
Daily Fibonacci 61.8%	0.9947
Daily Pivot Point S1	0.994
Daily Pivot Point S2	0.9905
Daily Pivot Point S3	0.9885
Daily Pivot Point R1	0.9995
Daily Pivot Point R2	1.0015
Daily Pivot Point R3	1.005

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold picks pace, flirts with $5,000

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and pushing higher towards the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.