The USD remains on the
backfoot as the support from the more hawkish repricing in interest rates
expectations got exhausted a couple of weeks ago. The market is now in line with the Fed’s baseline
projection of two cuts in 2025 and we will likely need strong US data to price
out the remaining rate cuts and give the greenback a boost.
The data for now has been good but not strong enough to make the market to price out the two cuts expected by year-end. The next key data will be the prices paid component in the ISM Services PMI tomorrow, the US Jobless Claims figures on Thursday, the NFP report on Friday and the CPI next week.
On the CHF side, the Swiss CPI today came mostly in line with expectations and didn’t change much in terms of market pricing. The market is still expecting 56 bps of easing by year-end with a 35% chance of a 50 bps cut at the upcoming SNB meeting.
On the 4 hour chart, we can see that the price broke below the key support at the 0.8185 level and started to consolidate just beneath it. This is where the sellers are piling in with a defined risk above the level to position for a drop into the 0.8038 level next. The buyers, on the other hand, will want to see the price rising back above the 0.8185 level to start targeting the 0.8350 level next.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
