Daily Analysis For USD/CHF  16-06-2023

Daily Analysis For USD/CHF 16-06-2023

USD/CHF Analysis


Key Points: -

·       The USD/CHF pair is currently consolidating after experiencing a significant decline, reaching a level not seen in over a month.


·       The US Dollar remains weak, hovering near a five-week low, which poses a challenge for the pair.


·       The Swiss Franc (CHF) is undermined by the prevailing positive sentiment in the market, providing some support to the USD/CHF pair.


Today's Scenario: -


Throughout the Asian session on Friday, the USD/CHF pair trades within a narrow range, showing consolidation after experiencing significant losses over the past three days. The pair manages to defend and hold above the 0.8900 level, which represents a one-month low reached the previous day. However, a substantial recovery remains elusive.


The US Dollar (USD) struggles to attract buyers and remains near a five-week low, acting as a significant headwind for the USD/CHF pair. Despite the Federal Reserve's (Fed) hawkish stance, investors believe that the central bank is nearing the end of its rate-hiking cycle, as evidenced by the recent decline in US Treasury bond yields and the post-European Central Bank (ECB) surge in the shared currency. These factors keep the USD depressed and continue to hinder the USD/CHF pair.


It is important to note that the Fed recently decided to leave interest rates unchanged after a two-day policy meeting, while signaling the potential for a 50 basis points increase by the end of the year. The "dot plot" released by the Fed indicates that officials now project rates peaking at 5.6% this year, higher than the previous projection of 5.1% in March. Additionally, the Fed expects slightly stronger economic growth, with forecasts of a 1% expansion this year (up from the 0.4% projected in May), followed by 1.1% in 2024 and 1.8% in 2025.


These factors contribute to traders refraining from initiating fresh bearish positions on the USD. Moreover, the overall positive sentiment in the equity markets weakens the safe-haven appeal of the Swiss Franc (CHF) and helps limit the downside for the USD/CHF pair, at least temporarily. Nonetheless, a significant recovery remains elusive, and cautiousness is advised for aggressive bullish traders, especially in the absence of relevant economic releases from the US. Despite this consolidation, the USD/CHF pair is on track to end the week with notable losses for the second consecutive week.


Diagram of USD/CHF: -


Economic Events : -


Date      Event                                                                                                           Impact         Currency

 01:30   (United States) Foreign Bond Investment                                        Low  USD

 01:30   (United States) Net Long-term TIC Flows                                                 Medium   USD

 01:30   (United States) Overall Net Capital Flows                                         Low  USD

 04:00   (New Zealand) Business NZ PMI                                                              Medium     NZD

 08:30   (Japan) BoJ Interest Rate Decision                                                   High    JPY

 12:30   (Austria) Inflation Rate MoM                                                                           Low     EUR

 12:30   (Austria) Inflation Rate YoY                                                                              Low     EUR

 12:30   (Austria) Harmonised Inflation Rate YoY                                                         Low    EUR

 12:30   (Austria) Harmonised Inflation Rate MoM                                       Low  EUR

 12:30   (Austria) CPI                                                                                                     High        EUR

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

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

 12:30   (United States) Fed Bullard Speech                                            Medium   USD

 13:30   (European Union) ECOFIN Meeting                                            Medium   EUR

 13:30   (Italy) Inflation Rate YoY                                                                           Medium      EUR

 13:30   (Italy) Harmonised Inflation Rate MoM                                                          Low    EUR

 13:30   (Italy) Harmonised Inflation Rate YoY                                                             Low    EUR

 13:30   (Italy) Inflation Rate MoM                                                                  Low     EUR

 13:30   (Italy) CPI                                                                                                           High       EUR

 14:30   (Euro Area) Inflation Rate MoM                                                                      Low     EUR

 14:30   (Euro Area) Core Inflation Rate YoY                                                   Low    EUR

 14:30   (Euro Area) Inflation Rate YoY                                                                   Medium    EUR

 14:30   (Euro Area) Labour Cost Index YoY                                                    Low   EUR

 14:30   (Euro Area) Wage Growth YoY                                                                         Low     EUR

 14:30   (Euro Area) CPI                                                                                                 High       EUR

 14:30   (Malta) Inflation Rate YoY                                                                  Low     EUR

 15:30   (Portugal) PPI YoY                                                                                             Low       EUR

 15:30   (Portugal) PPI MoM                                                                                         Low       EUR

 17:15   (United States) Fed Waller Speech                                            Medium   USD

 18:00   (Canada) Foreign Securities Purchases                                                            Low   CAD

 18:00   (Canada) Foreign Securities Purchases by Canadians                       Low CAD

 18:00   (Canada) Wholesale Sales MoM                                                                      Low     CAD

 19:30   (United States) Michigan Consumer Sentiment                                              High USD

 19:30   (United States) Michigan Inflation Expectations                                             Low  USD

 19:30   (United States) Michigan Current Conditions                                     Low  USD

 19:30   (United States) Michigan 5 Year Inflation Expectations                                 Low USD

 19:30   (United States) Michigan Consumer Expectations                           Low USD

 22:30   (United States) Baker Hughes Oil Rig Count                                     Low  USD

 22:30   (United States) Baker Hughes Total Rig Count                                                Low  USD


Buy Scenario: -


If USD/CHF buyers gain momentum, their initial target could be the 50-day moving average (DMA) acting as a support-turned-resistance around 0.8985. A successful break above this level might lead to a test of the psychological level at 0.9000.


However, before the USD/CHF bulls can celebrate, they will encounter the lower boundary of a rising trend channel that has been in place for six weeks, approximately near 0.9015, which may serve as a final test before a potential upward move. Till we do not advise to buy USD/CHF.


Sell Scenario: -


The CHF experienced its largest drop in a week, breaching key technical supports and encouraging bears to push the pair to multi-day lows. The bearish MACD signals also contribute to the sellers' confidence in the USD/CHF pair.


It is noteworthy that the RSI (14) line remains below 50.0, indicating a potential bottoming out and posing a challenge for USD/CHF bears in recent times.


Nevertheless, there are no immediate barriers ahead of the pair before it reaches a horizontal support zone established two months ago, around 0.8865-60.


Subsequently, the yearly low of approximately 0.8820 may act as an additional obstacle for further downward movement, while the 61.8% Fibonacci Expansion (FE) of the March-May price swings, near 0.8765, could entice more selling pressure. Till we do not advise to sell USD/CHF.


Support and Resistance Level: -

 Support              Resistance  

 S1 0.8865   -     R1 0.9014

 S2 0.8812  -      R2 0.9110

 S3 0.8716  -      R3 0.9163


default man
Trade360 Review 2023: Account Options, Trading Hours, Security Measures, Pros and Cons

Trade360 Review 2023: Account Options, T...

Finexo Review 2023: Account Types, Spreads, Customer Support and Expert Analysis

Finexo Review 2023: Account Types, Sprea...

eToro Review 2023:  Trading Platforms, Instrument Variety Pros and Cons

eToro Review 2023: Trading Platforms, I...

Comprehensive Review of FXTrading.com: Pros and Cons of a Leading Trading Platform

Comprehensive Review of FXTrading.com: P...

Sky Alliance Markets Review 2023: Pros, Cons, and Trading Features

Sky Alliance Markets Review 2023: Pros, ...