Published on Jun 14, 2023

Daily Analysis For USD/CHF 14-06-2023

USD/CHF Analysis

Key Points: -

· The USD/CHF pair faces difficulties in finding significant momentum on Wednesday and instead moves within a narrow range.

· The possibility of the Federal Reserve pausing its rate hikes soon weakens the USD and poses a challenge for the major currency.

· The CHF, considered a safe-haven currency, gains advantage from a more cautious market sentiment, which limits the upward potential before the Federal Open Market Committee (FOMC) meeting.

Today's Scenario: -

The USD/CHF pair lacks a clear direction on Wednesday and trades within a narrow range, slightly below the mid-0.9000s during the Asian session.

The US Dollar (USD) remains weak, hovering just above its lowest level since May 17, which exerts pressure on the USD/CHF pair. The recently released US consumer inflation data, which showed a minimal increase in May and a decrease in the yearly rate from 4.9% to 4.0%, reinforces the belief that the Federal Reserve (Fed) will refrain from raising interest rates after the two-day policy meeting scheduled for Wednesday. This situation continues to undermine the strength of the US Dollar.

Although the inflation rate is still double the Fed's target of 2%, indicating the possibility of further tightening measures, the market currently reflects a higher probability of a 25 basis points rate hike in the July FOMC meeting. These expectations support the relatively high yields of US Treasury bonds, providing some support to the US Dollar and the USD/CHF pair. However, any significant recovery remains elusive due to a corrective decline in US equity futures, which favors the safe-haven Swiss Franc (CHF). As a result, the price action remains subdued and range-bound in the first half of Wednesday's trading.

Traders are cautious and prefer to wait on the sidelines ahead of the highly anticipated FOMC policy decision. Additionally, attention will be focused on the post-meeting press conference by Fed Chair Jerome Powell. Market participants will eagerly seek fresh insights into the Fed's rate hike trajectory, as it will play a crucial role in shaping the USD's price dynamics and provide renewed momentum to the USD/CHF pair.

Diagram of USD/CHF: -

Economic Events : -

Date Event Impact Currency

02:00 (United States) API Crude Oil Stock Change Medium USD

04:15 (New Zealand) Current Account Medium NZD

05:30 (New Zealand) Food Inflation YoY Low NZD

10:00 (Netherlands) Balance of Trade Low EUR

10:30 (Finland) Inflation Rate YoY Low EUR

10:30 (Finland) Inflation Rate MoM Low EUR

10:30 (Finland) CPI Low EUR

11:30 (United Kingdom) GDP 3-Month Avg Medium GBP

11:30 (United Kingdom) Goods Trade Balance Non-EU High GBP

11:30 (United Kingdom) Balance of Trade Low GBP

11:30 (United Kingdom) Construction Output YoY Low GBP

11:30 (United Kingdom) Industrial Production YoY Low GBP

11:30 (United Kingdom) Industrial Production MoM Medium GBP

11:30 (United Kingdom) Manufacturing Production YoY Low GBP

11:30 (United Kingdom) Manufacturing Production MoM Medium GBP

11:30 (United Kingdom) Goods Trade Balance High GBP

11:30 (United Kingdom) GDP YoY Low GBP

11:30 (United Kingdom) GDP MoM High GBP

11:30 (Germany) Wholesale Prices MoM Medium EUR

11:30 (Germany) Wholesale Prices YoY Medium EUR

12:30 (China) FDI (YTD) YoY Medium CNY

12:30 (Slovakia) Inflation Rate MoM Low EUR

12:30 (Slovakia) Inflation Rate YoY Low EUR

12:30 (Slovakia) Core Inflation Rate MoM Low EUR

12:30 (Slovakia) Core Inflation Rate YoY Low EUR

12:30 (Slovakia) CPI Low EUR

13:30 (France) IEA Oil Market Report Medium EUR

14:30 (Euro Area) Industrial Production MoM Medium EUR

14:30 (Euro Area) Industrial Production YoY Low EUR

14:30 (Montenegro) GDP Growth Rate YoY Low EUR

15:00 (Germany) 10-Year Bund Auction Medium EUR

15:30 (Portugal) Inflation Rate MoM Low EUR

15:30 (Portugal) Inflation Rate YoY Low EUR

15:30 (Portugal) CPI Low EUR

15:30 (Ireland) Residential Property Prices YoY Low EUR

15:30 (Ireland) Residential Property Prices MoM Low EUR

16:30 (United States) MBA 30-Year Mortgage Rate Medium USD

16:30 (United States) MBA Mortgage Applications Low USD

16:30 (United States) MBA Mortgage Refinance Index Low USD

16:30 (United States) MBA Mortgage Market Index Low USD

16:30 (United States) MBA Purchase Index Low USD

17:00 (United Kingdom) NIESR Monthly GDP Tracker Low GBP

18:00 (Canada) New Motor Vehicle Sales Low CAD

18:00 (United States) Core PPI MoM Medium USD

18:00 (United States) Core PPI YoY Low USD

18:00 (United States) PPI YoY Low USD

18:00 (United States) PPI MoM High USD

20:00 (United States) EIA Heating Oil Stocks Change Low USD

20:00 (United States) EIA Refinery Crude Runs Change Low USD

20:00 (United States) EIA Crude Oil Stocks Change Medium USD

20:00 (United States) EIA Distillate Stocks Change Low USD

20:00 (United States) EIA Gasoline Production Change Low USD

20:00 (United States) EIA Crude Oil Imports Change Low USD

20:00 (United States) EIA Gasoline Stocks Change Medium USD

20:00 (United States) EIA Cushing Crude Oil Stocks Change Low USD

20:00 (United States) EIA Distillate Fuel Production Change Low USD

21:00 (United States) 17-Week Bill Auction Low USD

23:30 (United States) Fed Interest Rate Decision High USD

23:30 (United States) FOMC Economic Projections High USD

23:30 (United States) Interest Rate Projection - 1st Yr Medium USD

23:30 (United States) Interest Rate Projection - 2nd Yr Medium USD

23:30 (United States) Interest Rate Projection - Current Medium USD

23:30 (United States) Interest Rate Projection - Longer Medium USD

Buy Scenario: -

The immediate upside of the USD/CHF pair is protected by the round figure of 0.9100, followed by the convergence of the support-turned-resistance trendline from May 4 and the 100-DMA, which is located around 0.9115.

Subsequently, there is a formidable challenge for the USD/CHF bulls in the form of an 11-week declining resistance trendline and the 50% Fibonacci retracement level of the pair's downside movement from March to May, near the 0.9130 level.

It should be noted that additional hurdles for upward movement include the round figure of 0.9200, the 61.8% Fibonacci retracement level around 0.9205, and the previous swing high in late March at 0.9225. These levels act as filters that the bulls must overcome convincingly. Till we do not advise to buy USD/CHF.

Sell Scenario: -

On the downside, the psychological level of 0.9000 provides a floor for the USD/CHF price. However, a daily close below the support of the 50-DMA around 0.8985 holds greater significance in confirming further downside potential for the pair.

In the event that the quote remains bearish beyond 0.8985, there is a possibility of a decline towards the yearly low recorded in May, approximately around 0.8835. Till we do not advise to sell USD/CHF.