USDCHF Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | 0.26% | 24 Pips |  |
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| Week to-date | 0.22% | 19.8 Pips |  |
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| January | 0.62% | 55.8 Pips | |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In the United States, December’s Pending Home Sales declined by 5.5%, a substantial drop from the revised figure of 1.6% in November. This indicates a sharp contraction in the housing market, reflecting a slowing economic growth. The GDP annual rate for the fourth quarter, according to the flash estimate by the Bureau of Economic Analysis, decreased significantly to 2.3% from 3.1% in the previous quarter. On a positive note, the Personal Consumption Expenditure (PCE) excluding food and energy prices saw an increase to 2.5% from 2.2% in the previous quarter, showing some resilience in consumer spending. Furthermore, the core PCE Price Index showed an increase to 2.3%, up from 1.5%, highlighting inflationary pressures. The GDP Price Index also moved up to 2.2% from 1.9%, reinforcing concerns about rising prices within the economy. On the labor front, Initial Unemployment Insurance Claims for the week ending on January 25 decreased to 207K, from 223K, suggesting improving employment conditions. Meanwhile, the Federal Reserve left the interest rate unchanged at 4.5%, reflecting a cautious approach to monetary policy amidst these mixed economic indicators.
In Switzerland, the ZEW Financial Market Survey in January showed significant improvement, jumping to 17.7 points from a negative 20 points in December. This remarkable increase indicates rising optimism among financial experts about Switzerland’s economic conditions, projecting a positive sentiment in the financial markets.
As for the effect on USDCHF, the United States exhibits mixed signals with declining home sales and GDP growth, but with rising inflationary pressures and strong labor market indicators. In contrast, Switzerland shows an optimistic economic outlook as per the ZEW survey. Consequently, these economic disparities make the USDCHF vulnerable to fluctuations. If U.S. economic indicators continue to weaken while Switzerland maintains a positive outlook, investors may perceive the Swiss Franc as relatively more stable, potentially causing depreciation of the USDCHF pair. However, due to labor market strength, the U.S. dollar might show resilience, resulting in a balanced outcome for USDCHF in the short term. Overall, economic factors and market reactions should be closely monitored for their influence on USDCHF movements.
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What can we expect from USDCHF today?
USDCHF on Thursday rose 0.26% to 0.90882. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for USDCHF looks bullish as the pair ended higher after Thursday trading session.
Looking ahead for the day, immediate upside resistance level is R1 at 0.91084 with break above could target R2 at 0.91286 or figure level area. While towards the downside, we are looking at daily low of 0.90586 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.91037 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:
| R3 | 0.91535 |
| R2 | 0.91286 |
| R1 | 0.91084 |
| Daily Pivot | 0.90835 |
| S1 | 0.90633 |
| S2 | 0.90384 |
| S3 | 0.90182 |
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