Daily Analysis For USD/CHF  15-06-2023

Daily Analysis For USD/CHF 15-06-2023

USD/CHF Analysis


Key Points: -

·       The USD/CHF pair is poised to break above the resistance level of 0.9040, driven by optimism stemming from a V-shaped recovery in the USD Index. The recent guidance provided on interest rates has given investors clarity, and now their attention is turning towards the upcoming US Retail Sales data.


·       Swiss National Bank (SNB) Chairman Thomas Jordan has already stated that the negative effects of a low inflation environment are less significant than those of a highly-inflated scenario. This suggests that the SNB is more concerned about high inflation and may not take aggressive measures to counteract low inflation.


·       If the USD/CHF pair manages to surpass the 0.9040 level, it could indicate further upward momentum. Investors will closely watch the US Retail Sales data to gauge the strength of consumer spending, which is a crucial component of economic growth. Positive data could support the USD and push the pair higher.


Today's Scenario: -


The USD/CHF pair is currently facing strong resistance near the immediate level of 0.9040 during the Asian session. The Swiss Franc is striving to continue its upward movement, supported by a solid recovery in the US Dollar Index (DXY).


S&P500 futures in Tokyo are showing slight losses as investors remain cautious about the potential impact of further interest rate hikes by the Federal Reserve (Fed) on the United States' economy. The US equity market experienced significant volatility on Wednesday, with initial optimism following the Fed's decision to hold off on tightening monetary policy fading after Fed Chair Jerome Powell confirmed the likelihood of two small interest rate hikes by the end of the year.


The USD Index has displayed a V-shaped recovery after reaching a new four-week low at 102.66. The hawkish guidance provided by the Fed has injected new life into the USD Index, and it is expected to continue gaining ground amidst cautious market sentiment.


With interest rate guidance clarified, investors are now shifting their focus to the monthly US Retail Sales data for May. The data is expected to show a contraction of 0.1% compared to the previous month's expansion of 0.4%. Given the significant decline in food and gasoline prices, a careful analysis of the Retail Sales report will be necessary to determine whether the contraction in retail demand is due to lower prices of essential goods or a sign of weakening economic resilience.


Despite expectations of further interest rate increases by the Swiss National Bank (SNB), the Swiss Franc bulls are struggling to counter the strength of the US Dollar. SNB Chairman Thomas J. Jordan has already stated that the central bank will not wait for inflation to rise before taking action, as the negative effects of a low inflation environment are much less severe than those of high inflation.


It is important to note that market conditions can evolve rapidly, and factors such as economic indicators, central bank policies, and geopolitical developments can significantly influence the movement of the USD/CHF pair.


Diagram of USD/CHF: -


Economic Events : -


Date      Event                                                                                            Impact        Currency

0:00      (United States) Fed Press Conference                                              High  USD

4:15      (New Zealand) GDP Growth Rate YoY                                         Medium NZD

4:15      (New Zealand) GDP Growth Rate QoQ                                       Medium NZD

5:20      (Japan) Foreign Bond Investment                                       Low  JPY

5:20      (Japan) Stock Investment by Foreigners                                           Low  JPY

5:20      (Japan) Machinery Orders YoY                                                   Medium   JPY

5:20      (Japan) Machinery Orders MoM                                               Medium   JPY

5:20      (Japan) Imports YoY                                                                           Low     JPY

5:20      (Japan) Balance of Trade                                                    High    JPY

5:20      (Japan) Exports YoY                                                                    Medium     JPY

5:30      (Euro Area) Eurogroup Meeting                                                Medium   EUR

7:00      (Australia) Consumer Inflation Expectations                      Low AUD

7:00      (Australia) Part Time Employment Chg                                      Medium AUD

7:00      (Australia) Participation Rate                                                             Low   AUD

7:00      (Australia) Full Time Employment Chg                                       Medium AUD

7:00      (Australia) Unemployment Rate                                                       High   AUD

7:00      (Australia) Employment Change                                                       High   AUD

7:00      (Australia) RBA Bulletin                                                              Medium    AUD

7:00      (China) PBoC 1-Year MLF Announcement                         Low CNY

7:00      (China) House Price Index YoY                                                     Medium  CNY

7:30      (China) Unemployment Rate                                                            High   CNY

7:30      (China) Retail Sales YoY                                                                      High    CNY

7:30      (China) Industrial Production YoY                                       High CNY

7:30      (China) Fixed Asset Investment (YTD) YoY                   Medium CNY

9:05      (Japan) 3-Month Bill Auction                                                              Low  JPY

10:00    (Japan) Tertiary Industry Index MoM                                                  Low JPY

10:00    (Netherlands) Unemployment Rate                                Medium EUR

10:30    (Finland) GDP YoY                                                                                 Low   EUR

12:00    (Switzerland) Producer & Import Prices MoM                                  Low CHF

12:00    (Switzerland) Producer & Import Prices YoY                       Low CHF

12:15    (France) Inflation Rate MoM                                                      Medium   EUR

12:15    (France) Inflation Rate YoY                                                         Medium   EUR

12:15    (France) Harmonised Inflation Rate MoM                         Low EUR

12:15    (France) Harmonised Inflation Rate YoY                                           Low  EUR

13:30    (Spain) Balance of Trade                                                             Medium    EUR

14:10    (Spain) Obligacion Auction                                                    Low   EUR

14:10    (Spain) Bonos Auction                                                                        Low    EUR

14:30    (Euro Area) Balance of Trade                                                      Medium  EUR

14:30    (France) 5-Year OAT Auction                                                               Low  EUR

14:30    (France) 3-Year OAT Auction                                                               Low  EUR

14:30    (Greece) Construction Output YoY                                      Low EUR

14:30    (Montenegro) Inflation Rate YoY                                                       Low   EUR

14:30    (Montenegro) Harmonised Inflation Rate YoY                                  Low EUR

14:30    (Montenegro) Inflation Rate MoM                                     Low  EUR

15:00    (Belgium) Construction Output YoY                                     Low  EUR

15:30    (France) 10-Year Index-Linked OAT Auction                       Low EUR

15:30    (Ireland) Balance of Trade                                                    Low   EUR

16:00    (Portugal) Economic Activity YoY                                                      Low   EUR

16:00    (Portugal) Private Consumption YoY                                                  Low EUR

17:45    (Canada) Housing Starts                                                              Medium   CAD

17:45    (Euro Area) ECB Interest Rate Decision                                            High  EUR

17:45    (Euro Area) Marginal Lending Rate                                     Low  EUR

17:45    (Euro Area) Deposit Facility Rate                                                      High   EUR

18:00    (Canada) Manufacturing Sales MoM                                                Low  CAD

18:00    (United States) Import Prices YoY                                       Low  USD

18:00    (United States) Export Prices YoY                                       Low  USD

18:00    (United States) Import Prices MoM                               Medium USD

18:00    (United States) Export Prices MoM                             Medium  USD

18:00    (United States) NY Empire State Manufacturing Index              Medium USD

18:00    (United States) Retail Sales YoY                                                       High    USD

18:00    (United States) Retail Sales Ex Autos MoM                      High USD

18:00    (United States) Retail Sales MoM                                      High  USD

18:00    (United States) Philly Fed Business Conditions                                Low USD

18:00    (United States) Philly Fed Employment                                            Low  USD

18:00    (United States) Philly Fed CAPEX Index                                             Low  USD

18:00    (United States) Philly Fed Prices Paid                                                Low  USD

18:00    (United States) Philly Fed New Orders                                              Low  USD

18:00    (United States) Philadelphia Fed Manufacturing Index              Medium             USD

18:00    (United States) Jobless Claims 4-week Average                              High USD

18:00    (United States) Continuing Jobless Claims                        High USD

18:00    (United States) Initial Jobless Claims                                                High  USD

18:00    (United States) Retail Sales Ex Gas/Autos MoM                             High USD

18:15    (Euro Area) ECB Press Conference                                     High  EUR

18:30    (Belgium) Balance of Trade                                                                Low    EUR

18:30    (Kosovo) GDP Growth Rate YoY                                                        Low    EUR

18:45    (United States) Capacity Utilization                                     Low  USD

18:45    (United States) Manufacturing Production YoY                               Low USD

18:45    (United States) Industrial Production YoY                  Medium USD

18:45    (United States) Industrial Production MoM               Medium USD

18:45    (United States) Manufacturing Production MoM                            Low USD

19:30    (United States) Business Inventories MoM                Medium USD

19:30    (United States) Retail Inventories Ex Autos MoM                            Low USD

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

21:00    (United States) 8-Week Bill Auction                                     Low  USD

21:00    (United States) 4-Week Bill Auction                                     Low  USD

21:05    (United Kingdom) BoE Cunliffe Speech                                             Low  GBP

21:30    (Canada) 2-Year Bond Auction                                                          Low    CAD

21:30    (United States) 15-Year Mortgage Rate                                            Low  USD

21:30    (United States) 30-Year Mortgage Rate                                            Low  USD


Buy Scenario: -


For a bullish reversal, buyers of USD/CHF would need to reclaim the 0.9000 level as a first step. This would open up the possibility of testing the confluence of the 20-day and 50-day EMAs at 0.9033/38, followed by the intersection of the 100-day EMA and the daily high from April 10 at 0.9114/20. Till we do not advise to buy USD/CHF.


Sell Scenario: -


The USD/CHF pair continued its downward trend after breaking below the 50-day and 20-day Exponential Moving Averages (EMAs) located at 0.9038 and 0.9033, respectively. As a result, the pair extended its losses, breaching the key psychological level of 0.9000 and reaching fresh three-week lows around 0.8965, with further downside potential towards 0.8970. To maintain the bearish momentum, the USD/CHF needs to surpass the previous swing low of 0.8940 from May 22, which would then expose the next support level around the psychological level of 0.8900.


Overall, the trend for USD/CHF remains bearish, supported by the readings of the oscillators. Both the Relative Strength Index (RSI) and the three-day Rate of Change (RoC) continue to indicate bearish territory, suggesting further downside potential for the pair. Till we do not advise to sell USD/CHF.


Support and Resistance Level: -

 Support              Resistance  

 S1 0.8965   -     R1 0.9060

 S2 0.8918  -      R2 0.9108

 S3 0.8870  -      R3 0.9155


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