Fundamental Overview
The USD opened the week higher across the board as Trump followed through with his threats and imposed tariffs on Canada, Mexico and China on Saturday. Thankfully, it seems like Trump continues to use tariffs as a way to bring countries to the table and get some resolutions on his demands.
In fact, after some positive talks yesterday, the tariffs on Mexico and Canada have been paused for 30 days which brought some risk-on sentiment and weighed on the US Dollar. Today, Trump is expected to speak with Xi and positive news should weaken the greenback further.
On the CHF side, nothing has changed for now. As a reminder, the SNB cut interest rates by 50 bps at the last policy meeting bringing the policy rate to 0.50% and dropping the language signalling further cuts in the coming quarters.
This suggests that the central bank will likely slow the pace of easing which is something that the market was already expecting with roughly two 25 bps cuts priced in for this year. The recent Swiss CPI didn’t change much for the central bank as the data came basically in line with expectations.
USDCHF Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCHF eventually bounced around the major trendline and extended the rally into the 0.92 handle as Trump’s tariffs fears boosted the USD. The sellers piled in yesterday following the positive tariffs news and will now target a pullback into the trendline. The buyers, on the other hand, will likely continue to lean on the trendline to position for a rally into new highs.
USDCHF Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that there’s not much we can glean from this timeframe so we need to zoom in to see some more details.
USDCHF Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price broke below the minor upward trendline with the sellers increasing the bearish bets into the major trendline. The buyers will want to see the price rising back above the minor trendline to start targeting new highs. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the US Job Openings data and potentially a Trump-Xi call on tariffs. Tomorrow, we have the US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.
This article was written by Giuseppe Dellamotta at www.forexlive.com. Read More Details
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