USDCHF Technical Analysis

USDCHF Technical Analysis

USDThe Fed left interest rates unchanged as expected at the last meeting with a shift in the statement that indicated the end of the tightening cycle. The Summary of Economic Projections showed a downward revision to Growth and Core PCE in 2024 while the Unemployment Rate was left unchanged. Moreover, the Dot Plot was revised to show three rate cuts in 2024 compared to just two in the last projection. Fed Chair Powell didn't push back against the strong dovish pricing and even said that they are focused on not making the mistake of holding rates high for too long.The latest US PCE missed expectations across the board with the Core 6 month annualised rate falling below the Fed’s target at 1.9%. The NFP report beat expectations although there was more weakness under the hood. The latest ISM Manufacturing PMI beat expectations, while the ISM Services PMI missed by a big margin. The hawkish Fed members have been leaning on a more neutral side lately.The market expects the Fed to start cutting rates in Q1 2024.CHFThe SNB kept interest rates unchanged at 1.75% at the last meeting stating that they will adjust policy if necessary to ensure that inflation remains in the target range.The SNB Governor Jordan said that the monetary conditions are appropriate and that they do not forecast any further tightening.The latest Switzerland CPI beat expectations although the rate remains within the SNB’s target band. The Unemployment Rate remains steady at cycle lows.The Manufacturing PMI recently rose slightly although it remains in contraction, while the Services PMI hold on in expansion.The market expects the SNB to start cutting rates in Q2 2024.USDCHF Technical Analysis – Daily TimeframeOn the daily chart, we can see that USDCHF is approaching a key trendline around the 0.8560 level where we can find the confluence with the 50% Fibonacci retracement level and the red 21 moving average. This is where the sellers are likely 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 want to see the price breaking higher to invalidate the bearish setup and start targeting the 0.88 handle. USDCHF Technical Analysis – 4 hour TimeframeOn the 4 hour chart, we can see that the pair recently bounced on the support zone defined by the swing high around the 0.8460 and the green 50% Fibonacci retracement level. The buyers look firmly in control, and we can expect the price to reach the resistance zone around the 0.8560 level. USDCHF Technical Analysis – 1 hour TimeframeOn the 1 hour chart, we can see that right now we have a rangebound market between the 0.8460 support and the 0.8560 resistance. This gives us a few possible scenarios:The buyers are likely to pile in on the breakout of the trendline to target the 0.88 handle or lean on the support if the price were to pull back again from the trendline.The sellers will want to lean on the trendline to position for a drop into new lows and increase the bearish bets if the price were to break below the support zone. Upcoming EventsTomorrow we will get the latest US CPI report and the US Jobless Claims figures, while on Friday we conclude the week with the US PPI data. This article was written by FL Contributors at www.forexlive.com.