FUNDAMENTAL OVERVIEW
USD:
The US dollar strengthened
yesterday after Iran rejected the proposed ceasefire and outlined its own
conditions that included closure of all US bases in the Gulf, reparations for
the attacks, lifting of all sanctions and allowing Iran to retain its missile
program without restrictions.
These conditions are of
course unacceptable for the US, so we are now in a deadlock. For now, the US
dollar is likely to remain supported until there is an official de-escalation.
CHF:
On the CHF side, the SNB
left interest rates unchanged as widely expected at the last meeting but added
that their willingness to intervene in the FX market has increased due to the
conflict in the Middle East.
The central bank has also
revised the near-term inflation forecast to the upside given the energy price
shock but left all the other forecasts basically unchanged. There’s clearly no
appetite for negative interest rates as the SNB expects to counteract downward
pressure on inflation from a strong franc via interventions.
USDCHF TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that USDCHF is trading around the major downward trendline. This is where
we can expect the sellers to step in with a defined risk above the trendline to
position for a drop into new lows. The buyers, on the other hand, will look for
a break higher to increase the bullish bets into the 0.8040 level next.
USDCHF TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we
have a consolidation between the 0.7835 support and the trendline. Traders will
likely continue to play the range by buying around the support and selling
around the trendline until we get a breakout on either side.
USDCHF TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have
a minor upward trendline defining the recent bullish momentum. The buyers will
likely continue to lean on the trendline to keep pushing into new highs, while
the sellers will look for a break lower to increase the bearish bets into the
support. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the latest US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at investinglive.com.
