Fundamental
Overview
The USD opened the week
higher across the board as Trump followed through with his threats and imposed tariffs on Canada, Mexico and China on
Saturday. Thankfully, it seems like Trump continues to use tariffs as a way to
bring countries to the table and get some resolutions on his demands.
In fact, after some
positive talks yesterday, the tariffs on Mexico and Canada have been paused for
30 days which brought some risk-on sentiment and weighed on the US Dollar.
Today, Trump is expected to speak with Xi and positive news should weaken the
greenback further.
On the CHF side, nothing
has changed for now. As a reminder, the SNB cut interest rates by 50 bps at the last
policy meeting bringing the policy rate to 0.50% and dropping the language
signalling further cuts in the coming quarters.
This suggests that the
central bank will likely slow the pace of easing which is something that the
market was already expecting with roughly two 25 bps cuts priced in for this
year. The recent Swiss CPI didn’t change much for the central
bank as the data came basically in line with expectations.
USDCHF
Technical Analysis – Daily Timeframe
USDCHF Daily
On the daily chart, we can
see that USDCHF eventually bounced around the major trendline and extended the rally into
the 0.92 handle as Trump’s tariffs fears boosted the USD. The sellers piled in
yesterday following the positive tariffs news and will now target a pullback
into the trendline. The buyers, on the other hand, will likely continue to lean
on the trendline to position for a rally into new highs.
USDCHF Technical
Analysis – 4 hour Timeframe
USDCHF 4 hour
On the 4 hour chart, we can
see that there’s not much we can glean from this timeframe so we need to zoom
in to see some more details.
USDCHF Technical
Analysis – 1 hour Timeframe
USDCHF 1 hour
On the 1 hour chart, we can
see that the price broke below the minor upward trendline with the sellers increasing
the bearish bets into the major trendline. The buyers will want to see the price
rising back above the minor trendline to start targeting new highs. The red
lines define the average daily range for today.
Upcoming
Catalysts
Today we get the US Job Openings data and
potentially a Trump-Xi call on tariffs. Tomorrow, we have the US ADP and the US
ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures. On
Friday, we conclude the week with the US NFP report.
