Usdchf sees slight increase amid mixed economic signals

USDCHF Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.01%	1 Pips
Week to-date	-0.47%	-43.5 Pips
January	1.02%	91.8 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD Monthly Retail Trade (1-mth)

What happened lately

In the United States, the CPI Inflation Rate in December showed an increase to 0.4%, slightly up from November’s 0.3%. However, when excluding the volatile food and energy sectors, the CPI Inflation Rate for December decreased to 0.2% from November’s 0.3%. Similarly, the annual CPI Inflation Rate, excluding food and energy, showed a slight drop to 3.2% from 3.3%. Conversely, the overall annual CPI Inflation Rate rose to 2.9% from 2.7% the previous month. One notable improvement was seen in the U.S. Monthly Treasury Budget Statement, which improved substantially in December, with a negative balance of $87 billion compared to November’s $367 billion. Meanwhile, the Producer Price Index (PPI), which reflects changes in the selling prices received by domestic producers, saw mixed results. Excluding food and energy, the monthly PPI fell to 0% in December from 0.2% in November, although the annual PPI rose to 3.3% from 3.0%. The monthly PPI decreased to 0.2% from 0.4%. However, the annual PPI, excluding food and energy sectors, rose slightly to 3.5% from 3.4%. These figures suggest mixed economic signals, with some inflation metrics increasing while others are showing deceleration. The Treasury Budget improvement indicates some relief on government financial constraints.

Regarding the USDCHF exchange rate, the stable data, with minor changes in inflation and producer prices, supports overall consolidation. The improvement in the U.S. Treasury budget could signal potential fiscal policy stability, offering bullish support for the US Dollar. However, the mixed inflation and producer price data indicate uncertainty, keeping traders cautious and possibly suppressing significant movements for the USDCHF. The minor uptick of 0.01% to 0.91242 suggests trader indecision amid these varying signals. Traders should monitor the upcoming U.S. Monthly Retail Trade figures, as significant surprises could sway the pair significantly beyond current consolidation levels.

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What can we expect from USDCHF today?

USDCHF on Wednesday rose 0.01% to 0.91242. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCHF looks mixed as the pair is likely to consolidate above 0.90858 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.91461 or trades above daily pivot 0.91159. Break above could target R1 at 0.91544. While to the downside, we are looking at 0.90858 (S1) and daily low of 0.90775 as support levels. USDCHF need to break on either side to indicate a short-term bias. A break above 0.91461 may suggest continuation after recent positive movement.

For the week to-date, take note that USDCHF is mixed as compared to the prior week.

Key levels to watch out:

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