USDCHF Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.1% | -9 Pips |  |
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| Week to-date | -0.94% | -83.6 Pips | |
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| March | -2.9% | -261.3 Pips | |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In the United States, the initial unemployment claims rose slightly in the week ending 15 March, reaching 223K, an increase from the revised previous figure of 221K, according to the Department of Labor. This minor uptick could indicate a subtle shift in the job market dynamics. Meanwhile, the U.S. Manufacturing Business Outlook Survey, conducted by the Philadelphia Fed, decreased significantly to 12.5 points in March from 18.1 points in February, suggesting a slowdown in the manufacturing sector. Moreover, the Federal Reserve’s interest rate projections for the near future have seen a reduction, with the 1st year’s projections falling to 3.4% from the previous projection of 3.9%, and the 2nd year’s also dropping to 3.1% from 3.4%. In the longer term, projections remain unchanged at 3%, and the Federal Funds Rate remains steady at 4.5%. This reflects an adjustment in economic expectations amidst changing economic conditions.
In Switzerland, the Swiss National Bank (SNB) has decided to lower its policy rate to 0.25% from the previous rate of 0.5%. This decision reflects the SNB’s response to economic conditions in Switzerland, intending to provide monetary stimulus to the economy, potentially to counteract deflationary pressures or promote growth. Such a decrease can have far-reaching implications for Swiss franc liquidity and lending rates within the Swiss economy.
The USDCHF pair, reflecting the exchange rate between the US dollar and the Swiss franc, dropped by 0.1% to 0.87620, indicating a consolidation phase. The impact of economic news on USDCHF can be multifaceted. The rise in US unemployment claims and the lowered manufacturing outlook could lead to a less favorable view of the US economy, potentially weakening the dollar. Conversely, the decrease in Swiss interest rates might typically weaken the Swiss franc, but in this context, where both economies face monetary adjustments, the interactions can be complex. The unchanged Fed funds rate and lower future interest projections might signal a steady stance by the US, reinforcing a cautious economic outlook. These combined factors are contributing to a period of consolidation in the USDCHF currency pair as market participants weigh the potential impacts of these differing monetary policies and economic indicators.
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What can we expect from USDCHF today?
USDCHF on Thursday dropped -0.1% to 0.87620. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDCHF looks mixed as the pair is likely to consolidate above 0.8756 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.87760 or trades above daily pivot 0.8766. Break above could target R1 at 0.8772. While to the downside, we are looking at 0.8756 (S1) and daily low of 0.87600 as support levels. USDCHF need to break on either side to indicate a short-term bias. A close below 0.87600 would indicate selling pressure.
For the week to-date, take note that USDCHF is mixed as compared to the prior week.
Key levels to watch out:
| R3 | 0.8788 |
| R2 | 0.8782 |
| R1 | 0.8772 |
| Daily Pivot | 0.8766 |
| S1 | 0.8756 |
| S2 | 0.875 |
| S3 | 0.874 |
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