Published on May 12, 2023

Daily Analysis For USD/CHF 12-05-2023

USD/CHF Analysis

Economic Events and Scenario for USD/CHF

Economic Events : -

GMT	Event	Impact	Currency
04:00	(New Zealand) Business Inflation Expectations	Low	NZD
04:35	(Japan) 3-Month Bill Auction	Low	JPY
06:00	(Finland) Current Account	Low	EUR
07:00	(United Kingdom) Goods Trade Balance	High	GBP
07:00	(United Kingdom) GDP YoY	Low	GBP
07:00	(United Kingdom) Goods Trade Balance Non-EU	High	GBP
07:00	(United Kingdom) Industrial Production MoM	Medium	GBP
07:00	(United Kingdom) Industrial Production YoY	Low	GBP
07:00	(United Kingdom) Manufacturing Production MoM	Medium	GBP
07:00	(United Kingdom) Manufacturing Production YoY	Low	GBP
07:00	(United Kingdom) Construction Output YoY	Low	GBP
07:00	(United Kingdom) Balance of Trade	Low	GBP
07:00	(United Kingdom) GDP Growth Rate YoY	High	GBP
07:00	(United Kingdom) GDP Growth Rate QoQ	High	GBP
07:00	(United Kingdom) Business Investment QoQ	Medium	GBP
07:00	(United Kingdom) Business Investment YoY	Low	GBP
07:00	(United Kingdom) GDP MoM	High	GBP
07:00	(United Kingdom) GDP 3-Month Avg	Medium	GBP
07:00	(United Kingdom) Construction Orders YoY	Low	GBP
07:45	(France) Inflation Rate YoY	Medium	EUR
07:45	(France) Inflation Rate MoM	Medium	EUR
07:45	(France) Harmonised Inflation Rate MoM	Low	EUR
07:45	(France) Harmonised Inflation Rate YoY	Low	EUR
08:00	(China) FDI (YTD) YoY	Medium	CNY
08:00	(Spain) CPI	High	EUR
08:00	(Spain) Core Inflation Rate YoY	Low	EUR
08:00	(Spain) Inflation Rate YoY	Low	EUR
08:00	(Spain) Inflation Rate MoM	Low	EUR
08:00	(Spain) Harmonised Inflation Rate YoY	Low	EUR
08:00	(Spain) Harmonised Inflation Rate MoM	Low	EUR
08:00	(United States) Fed Bowman Speech	Medium	USD
09:00	(Euro Area) ECB Guindos Speech	High	EUR
10:00	(China) Current Account	Medium	CNY
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Latvia) Current Account	Low	EUR
12:15	(United Kingdom) BoE Pill Speech	Medium	GBP
13:00	(United Kingdom) NIESR Monthly GDP Tracker	Low	GBP
13:30	(United States) Export Prices YoY	Low	USD
13:30	(United States) Import Prices YoY	Low	USD
13:30	(United States) Import Prices MoM	Medium	USD
13:30	(United States) Export Prices MoM	Medium	USD
13:45	(Germany) Current Account	Low	EUR
14:00	(Ecuador) Balance of Trade	Low	USD
15:00	(United States) Michigan Consumer Sentiment	High	USD
15:00	(United States) Michigan Inflation Expectations	Low	USD
15:00	(United States) Michigan Consumer Expectations	Low	USD
15:00	(United States) Michigan 5 Year Inflation Expectations	Low	USD
15:00	(United States) Michigan Current Conditions	Low	USD
15:30	(Canada) Senior Loan Officer Survey	Medium	CAD
17:00	(United States) WASDE Report	Low	USD
18:00	(United States) Baker Hughes Oil Rig Count	Low	USD
18:00	(United States) Baker Hughes Total Rig Count	Low	USD

Today's Scenario: - On the daily chart of USD/CHF, we can observe that the pair has been trading within a range for the past month. However, despite the sideways movement, there is a bearish bias in the pair as the moving averages are acting as resistance for the downtrend. The decline in USD/CHF can be attributed to the US regional banking crisis and market expectations of interest rate cuts, which have significantly weakened the US dollar.

Currently, market participants are closely monitoring the speed at which inflation is expected to decrease and reach the target level. There is still concern about persistently high inflation, and this is impacting price action across various markets. Traders are cautious ahead of the release of the US Consumer Price Index (CPI) report, as any data indicating higher-than-expected inflation might be poorly received by the market. In such a scenario, the US dollar is expected to strengthen as market participants may reassess their interest rate expectations.

Please note that the market is dynamic, and the actual outcome may differ from expectations.

Buy Scenario: - There is no change in the outlook for USD/CHF, and the intraday bias remains neutral at the moment. While the downtrend from 1.0146 could potentially continue, there is expected to be strong support around the 61.8% projection level of 1.0146 to 0.9058 from 0.9439, which is near the long-term support level of 0.8756. This support level could lead to a rebound, at least on the first attempt.

On the upside, a break of the resistance at 0.8993 would indicate a short-term bottoming pattern, especially with a bullish convergence condition in the 4-hour MACD. This would shift the bias back to the upside, with a target of the 55-day Exponential Moving Average (EMA) at 0.9054 and possibly beyond.

In the bigger picture, the decline from 1.1046 (2022 high) is viewed as a leg within the long-term range pattern established between 1.0342 (2016 high) and the current levels. Till we do not advise to buy USD/CHF.

Sell Scenario: - On the other hand in USD/CHF pair, a downside is expected to be limited by the support level at 0.8756, which would indicate a potential reversal. A sustained break above the 0.9058 level, now turned resistance, would be the first sign of a medium-term bottoming pattern. However, a decisive break of the 0.8756 support level would carry larger bearish implications for the pair.

Please note that market conditions are subject to change, and actual price movements may differ from expectations. Till we do not advise to sell USD/CHF.

Support and Resistance Level: -