USDCHF Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -3.79% | -324.8 Pips |  |
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| Week to-date | -4.21% | -362.4 Pips | |
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| April | -6.8% | -601 Pips |  |
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Upcoming key events (London Time)
Fri 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)
What happened lately
The United States has seen some noteworthy economic developments in March. The Monthly Treasury Budget Statement showed improvement with a deficit of -$161 billion, better than the -$307 billion in February, indicating better fiscal management or increased government revenue. Additionally, inflation seems to be softening slightly, as the CPI Inflation Rate excluding Food and Energy decreased to 2.8% from 3.1%, and the overall CPI Inflation Rate for the 12-month period fell to 2.4% from 2.8%. This easing of inflation could signal a less aggressive approach required by the Federal Reserve regarding interest rate adjustments. However, there was a slight uptick in initial unemployment claims for the week ending April 5 to 223,000 from the earlier 219,000, suggesting a potential area of concern in the labor market. Furthermore, the CPI Inflation Rate excluding Food and Energy for the month decreased marginally to 0.1% from 0.2% in February, underscoring the moderating inflation scenario.
These economic indicators from the U.S. suggest a mixed picture of improvement in some areas while showing vulnerabilities in others. With the drop in inflation and improving budget deficits, there is a positive sentiment that could support the U.S. dollar. However, the rise in unemployment claims requires careful monitoring to avoid downward pressure.
The USDCHF currency pair has seen a significant drop of -3.79% to 0.82398. This decline could be attributed partially to the U.S. economic data that points to lower inflation, which might reduce the attractiveness of holding the dollar as an inflation hedge. Additionally, the slight increase in unemployment claims could exert negative sentiment towards the U.S. labor market, further weakening the USD. However, the upcoming U.S. PPI excluding Food and Energy sectors might influence the direction of USDCHF, especially if it shows unexpected results, leading to market volatility and potential corrective movements in the currency pair. Overall, while the recent data may apply downward pressure on USDCHF, the upcoming economic events could play a crucial role in shaping its near-term trajectory.
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What can we expect from USDCHF today?
USDCHF on Thursday dropped -3.79% to 0.82398. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDCHF looks bearish as the pair posted lower in Thursday trading session.
Looking ahead for the day, immediate support level is at S1 0.812 with break below could see further selling pressure towards S2 at 0.80003. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.85747 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.82276 would indicate selling pressure.
For the week to-date, take note that USDCHF is bearish as the pair posted lower by -4.21%.
Key levels to watch out:
| R3 | 0.88142 |
| R2 | 0.86945 |
| R1 | 0.84671 |
| Daily Pivot | 0.83474 |
| S1 | 0.812 |
| S2 | 0.80003 |
| S3 | 0.77729 |
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