Fundamental
Overview
The USD has strengthened
since Friday as Treasury yields bounced following some positive Trump’s
comments on China. Overall, the US dollar performance has been mixed as markets
have been driven by quick changes in risk sentiment given the lack of US data.
On the domestic side, the
US government shutdown continues to delay many key US economic reports.
Tomorrow though, we will get the US CPI data since it’s crucial for social security
benefits adjustment required by November.
The dollar “repricing
trade” needs strong US data to keep going, especially on the labour market
side, so any hiccup on that front should keep weighing on the greenback.
Since Trump’s threat of
massive tariffs on China, the market pricing turned more dovish with 126 bps of
easing seen by the end of 2026 (the Fed projected just 75 bps). Therefore, if
we de-escalate further and the US data picks up, there’s plenty of room for the
greenback to appreciate.
On the CHF side, nothing
has changed. The SNB left interest rates steady and kept everything unchanged
at the last meeting. SNB’s President Schlegel didn’t offer any forward guidance
but he did say that the bar to cut rates further is very high and negative
inflation prints in the short-term won’t be enough.
The last Swiss inflation
prints rebounded a bit and the central bank does expect some increases in the
next quarters, but there’s a long way to go before breaching their 2% inflation
limit. So, this leaves the CHF trading mostly based on risk sentiment.
USDCHF
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that USDCHF bounced around the key 0.7872 level and extended the rally into
the 0.80 handle. The buyers will likely continue to target the resistance
around the 0.8073 level. If we get there, we can expect the sellers to step in
with a defined risk above the resistance to position for a drop back into the
0.7872 level.
USDCHF Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that the price is now trading between two trendlines. The sellers will
likely step in around the downward trendline with a defined risk above it to
target a drop into the 0.7872 level. The buyers, on the other hand, will want
to see the price breaking higher to increase the bullish bets into the 0.8073
resistance.
USDCHF Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, there’s
not much else we can add, but if we get a rejection here, we can expect the
buyers to lean on the upward trendline to keep pushing into new highs, while
the sellers will look for a break lower to increase the bearish bets into new
lows
