Usdchf experiences slight drop amid mixed economic signals from US and Switzerland’s declining confidence

USDCHF Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.03%	-3 Pips
Week to-date	0.18%	16 Pips
March	-2.03%	-183.3 Pips

Upcoming key events (London Time)

Fri 12:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In the United States, several economic indicators provide a mixed picture of the country’s economic health for February and the fourth quarter of 2024. Pending home sales rose by 2% in February, an improvement from January’s decline of 4.6%, suggesting a potential rebound in the housing market. However, the new orders for durable goods fell by 0.9% in February, reversing a significant revised increase of 3.2% in January. Moreover, new orders for nondefense capital goods excluding aircraft decreased to a -0.3% in February, following an increase in January. On the positive side, durable goods orders excluding transportation rose by 0.7% compared to January’s unchanged figure. Meanwhile, the U.S. GDP grew at an annual rate of 2.4% in Q4 2024, showing a slight improvement from Q3’s 2.3%. The GDP Price Index slightly declined to 2.3% from 2.4% in the previous quarter. Additionally, the PCE price index, excluding food and energy, edged down to 2.6% from 2.7%. Initial unemployment claims saw a very slight decrease to 224K in the week ending March 22, indicating some steadiness in the labor market.

In Switzerland, the ZEW Financial Market Survey showed a significant decrease, with the index dropping to -10.7 points in March from 3.4 points in February. This suggests a decline in financial market confidence, which could have implications for investor sentiment and economic outlook in Switzerland.

The recent U.S. economic data, combined with weakness in Switzerland’s financial market confidence as reflected by the ZEW index, creates a complex backdrop for the USDCHF currency pair. Although the U.S. economy shows continuing growth and some stability, as indicated by home sales and a lower unemployment claim, weaknesses in durable goods orders might dampen enthusiasm for the dollar. Conversely, declining confidence in Switzerland might limit CHF strength. Despite this, USDCHF is consolidating, hinting at uncertainty awaiting further catalysts, especially with the upcoming release of the U.S. PCE Price Index excluding food and energy. Increased geopolitical tensions or unexpected data could significantly affect the pair’s movement, so investors are likely keeping a close watch on these developments.

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What can we expect from USDCHF today?

USDCHF on Thursday dropped -0.03% to 0.88390. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for USDCHF looks mixed as the pair is likely to consolidate above 0.88333 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.88490 or trades above daily pivot 0.88411. Break above could target R1 at 0.88469. While to the downside, we are looking at 0.88333 (S1) and daily low of 0.88354 as support levels. USDCHF need to break on either side to indicate a short-term bias. A close below 0.88354 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:

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