|

USD/CHF Price Analysis: Stumbles as the CHF gains strength and forms bearish-harami

  • Swiss Producer and Import Prices for April remain stable at 0.2% MoM, with a 90% chance of a 25 bps rate hike by SNB in June.
  • New York Fed’s manufacturing index nosedives, while Fed speakers emphasize high inflation and the need for higher interest rates.
  • USD/CHF tests solid support faces downward bias as bearish RSI and 3-day RoC indicators suggest sellers remain in control.

The USD/CHF marched down after hitting a daily high of 0.8987, but US Dollar (USD) bulls’ lack of strength, weak US economic data, and expectations of an aggressive Swiss National Bank (SNB) bolstered the Swiss Franc (CHF). At the time of writing, the USD/CHF is trading at 0.8944, down 0.40%.

Fundamental backdrop

At the beginning of the week, the USD/CHF continued to trend lower, but it’s facing solid support at around the 20-day Exponential Moving Average (EMA). Data in the European session showed that the Producer and Import Prices for April in Switzerland were unchanged at 0.2% MoM, while annually based, ticked lower from 2.1% to 1%. Money market futures odds for a 25 bps rate hike by the SNB are at 90% by the June meeting.

On the US front, the New York Fed announced that its manufacturing index plummeted to -31.3 from the -3.9% contraction expected. Further data showed that the labor market is easing, but prices are rising. Regarding Fed speakers crossing the wires, they reiterated that inflation is high, that there’s some work to do, and that higher interest rates are still working its way through the economy.

USD/CHF Price Analysis: Technical outlook

The USD/CHF is downward biased but testing solid support, which, if it holds, can pave the way for further upside. Nevertheless, the Relative Strength Index (RSI) indicator at 48.19 is in bearish territory, suggesting that sellers remain in charge, while the 3-day Rate of Change (RoC) remains above zero but is about to turn bearish.

If USD/CHF resumes below the 20-day EMA At 0.8942, the next support would be 0.8900. The break below will expose the May 10 daily low of 0.8868 before challenging the YTD low of 0.8879. Conversely, the USD/CHF first resistance would be the 0.9000 figure. A breach of the latter will expose the 50-day EMA At 0.9033, followed by the 100-day EMA at 0.9155.

USD/CHF

Overview
Today last price0.8946
Today Daily Change-0.0037
Today Daily Change %-0.41
Today daily open0.8983
 
Trends
Daily SMA200.8924
Daily SMA500.9069
Daily SMA1000.9165
Daily SMA2000.9415
 
Levels
Previous Daily High0.8988
Previous Daily Low0.8897
Previous Weekly High0.8988
Previous Weekly Low0.8868
Previous Monthly High0.9198
Previous Monthly Low0.8852
Daily Fibonacci 38.2%0.8953
Daily Fibonacci 61.8%0.8932
Daily Pivot Point S10.8924
Daily Pivot Point S20.8866
Daily Pivot Point S30.8834
Daily Pivot Point R10.9014
Daily Pivot Point R20.9046
Daily Pivot Point R30.9105

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

GBP/USD off highs, back to 1.3620

GBP/USD remains slightly on the defensive at the end of the week, receding to the low 1.3600s after hitting fresh tops past 1.3670 earlier in the day. Cable’s correction comes after two daily gains in a row and amid a tepid advance in the Greenback, while poor UK data also accompany the downside.

EUR/USD treads water below 1.1700

EUR/USD now trades with modest losses around 1.1670 following another unsuccessful atempt to advance past 1.1700 the figure in a convincing fashion. The pair’s decline follows a maginal rebound in the US Dollar as market participants continue to assess recent US data as well as developments from the US bond market.

Gold trims gains, recedes to the sub-$4,600 area

Gold rapidly leaves behind Thursday’s inconclusive price action and advances markedly on Friday, briefly surpassing the $4,600 mark per troy ounce to hit three-month peaks. Meanwhile, the precious metal’s solid performance comes despite marginal gains in the buck coupled with another day of rising US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP bulls accelerate rally amid rising ETF inflows

The cryptocurrency market remains bullish on Friday, led by Bitcoin’s surge above $77,000. Altcoins, including Ethereum and Ripple, mirror BTC’s positive outlook, trading near $2,400 and $1.35, respectively.

Week ahead – Fed’s Jackson Hole and Nvidia earnings to dictate markets

Kevin Warsh to make his Jackson Hole debut amid confusing messaging. But a major hawkish surprise unlikely after bond market intervention. Nvidia earnings to also determine market direction as stock rally cools.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.