Published on Apr 18, 2023

Daily Analysis For USD/CHF 18-04-2023

USD/CHF Analysis

Economic Events and Scenario for USD/CHF

Economic Events : -

GMT	Event	Impact	Currency
01:00	(Cyprus) Orthodox Easter Tuesday	None	EUR
02:30	(Australia) RBA Meeting Minutes	High	AUD
03:00	(China) Industrial Capacity Utilization	Low	CNY
03:00	(China) Retail Sales YoY	High	CNY
03:00	(China) Industrial Production YoY	High	CNY
03:00	(China) Fixed Asset Investment (YTD) YoY	Medium	CNY
03:00	(China) GDP Growth Rate YoY	High	CNY
03:00	(China) GDP Growth Rate QoQ	Medium	CNY
03:00	(China) Unemployment Rate	High	CNY
07:00	(United Kingdom) Average Earnings excl. Bonus (3Mo/Yr)	Low	GBP
07:00	(United Kingdom) Average Earnings incl. Bonus (3Mo/Yr)	Medium	GBP
07:00	(United Kingdom) Unemployment Rate	High	GBP
07:00	(United Kingdom) Claimant Count Change	High	GBP
07:00	(United Kingdom) Employment Change	High	GBP
07:00	(United Kingdom) HMRC Payrolls Change	Low	GBP
09:00	(Italy) Balance of Trade	Medium	EUR
09:40	(Spain) 3-Month Letras Auction	Low	EUR
10:00	(China) FDI (YTD) YoY	Medium	CNY
10:00	(Euro Area) ZEW Economic Sentiment Index	Medium	EUR
10:00	(Euro Area) Balance of Trade	Medium	EUR
10:00	(Germany) ZEW Current Conditions	Low	EUR
10:00	(Germany) ZEW Economic Sentiment Index	High	EUR
10:00	(United Kingdom) 30-Year Treasury Gilt Auction	Low	GBP
11:00	(Ireland) Balance of Trade	Low	EUR
13:30	(Canada) New Motor Vehicle Sales	Low	CAD
13:30	(Canada) Inflation Rate MoM	Medium	CAD
13:30	(Canada) Core Inflation Rate YoY	Medium	CAD
13:30	(Canada) Inflation Rate YoY	High	CAD
13:30	(Canada) Core Inflation Rate MoM	Low	CAD
13:30	(Canada) CPI Median YoY	High	CAD
13:30	(Canada) CPI Trimmed-Mean YoY	High	CAD
13:30	(United States) Housing Starts	Medium	USD
13:30	(United States) Building Permits	High	USD
13:30	(United States) Housing Starts MoM	Medium	USD
13:30	(United States) Building Permits MoM	Medium	USD
13:55	(United States) Redbook YoY	Low	USD
14:00	(Ecuador) Balance of Trade	Low	USD
14:00	(Euro Area) ECB Elderson Speech	Low	EUR
16:00	(New Zealand) Global Dairy Trade Price Index	Low	NZD
16:30	(United States) 52-Week Bill Auction	Low	USD
18:00	(United States) Fed Bowman Speech	Medium	USD
21:30	(United States) API Crude Oil Stock Change	Medium	USD

Today's Scenario: - The USD/CHF pair is struggling to continue its two-day recovery from a multi-month low, currently trading around 0.8990-85 in early Tuesday trading. The lack of momentum is likely due to a cautious market mood ahead of key data from China, which is being closely watched due to recent recession concerns.

Despite this, buyers of USD/CHF remain optimistic due to the recent recovery of the US dollar, which is being supported by higher US Treasury bond yields and hawkish Fed expectations. The US Dollar Index (DXY) rebounded from a one-year low on Friday and continued to rise on Monday, thanks to positive US data and increasing expectations of another Fed rate hike in May. Additionally, the market is now less likely to price in a rate cut later in 2023. US Treasury bond yields have also increased over the past three days, with the 10-year yield now at 3.60% and the two-year yield at 4.20%.

Buy Scenario: - To further boost buyer confidence, the currency pair needs to surpass the 50% retracement of last week's decline at 0.8989 and the descending 200-hour moving average, currently at 0.9006. In the past month, the USD/CHF pair has occasionally risen above its 200-hour moving average, with the most recent occurrence being on April 10. However, these gains were short-lived, and the price consistently fell back with downward momentum. Till we do not advise to buy USD/CHF.

Sell Scenario: - The USD/CHF pair is currently experiencing an upward trend due to the strength of the US dollar. The pair has surpassed its 100-hour moving average at 0.8953. However, the pair had fallen below this moving average last Tuesday near 0.9059 and continued to decline, reaching a low of 0.8859 on Thursday, which was a decline of 200 pips in just 2-3 days. On Friday, the price rebounded after hitting a low of 0.8866 and closed at 0.8937. Despite almost touching the 38.2% retracement of the week's trading range, the high price on Friday found willing sellers.

The declining 100-hour moving average and the rising price on Friday allowed for a shift of the short-term bullish bias after breaking above both the 100-hour moving average and the 38.2% retracement today. However, the USD/CHF has been on a longer-term downtrend, with the chart showing a downward trend from left to right. Therefore, more work is needed to solidify the bullish sentiment. Till we do not advise to sell USD/CHF.

Support and Resistance Level: -