Key Highlights
- USD/CHF is correcting losses and trading above the 0.9650 support.
- A key bearish trend line is forming with resistance near 0.9750 on the 4-hours chart.
- The Swiss CPI increased 0.2% in Dec 2019 (YoY), whereas the forecast was 0%.
- The US ADP Employment could change 150K in Dec 2019, up from the last 67K.
USD/CHF Technical Analysis
After a strong decline, USD/CHF found support near the 0.9650 area. The US Dollar started an upside correction above 0.9700, but there are many hurdles on the upside against the Swiss Franc.
Looking at the 4-hours chart, the pair traded as low as 0.9646 before starting an upside correction. It climbed above the 23.6% Fib retracement level of the downward move from the 0.9831 high to 0.9646 low.
The pair climbed above 0.9700, but it struggled to surpass the 0.9740 area. It seems like the 50% Fib retracement level of the downward move from the 0.9831 high to 0.9646 low is acting as a hurdle.
Besides, there is a key bearish trend line forming with resistance near 0.9750 on the same chart. Therefore, a clear break above the 0.9740 and 0.9750 levels is needed for upside continuation towards 0.9800.
If the pair fails to climb above 0.9750, there are chances of a fresh decline in USD/CHF. The main support is near the 0.9650 level, below which there is a risk of a sharp decline towards 0.9600.
Fundamentally, the Swiss Consumer Price Index for Dec 2019 was issued by the Swiss Federal Statistical Office. The market was looking for no change in the CPI in Dec 2019 compared with the same month a year ago.
The actual result was above the market forecast, as there was a 0.2% rise in the CPI in Dec 2019 (YoY). Looking at the monthly figure, there was no change in the CPI.
The report added:
The average annual inflation reached +0.4% in 2019. This increase is due in particular to higher prices for housing rentals and for new cars. In contrast, prices for petroleum products and medicines decreased.
Overall, USD/CHF might struggle to climb above 0.9750 in the near term. Moreover, EUR/USD and GBP/USD are also struggling to continue higher above 1.1200 and 1.3200 respectively.
Upcoming Economic Releases
- Euro Zone Consumer Confidence Dec 2019 – Forecast -8.1, versus -8.1 previous.
- US ADP Employment Change Dec 2019 – Forecast 150K, versus 67K previous.
