Usdchf movements reflect mixed US economic signals

USDCHF Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.7%	57.1 Pips
Week to-date	0.49%	40.3 Pips
April	-7.34%	-649 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United States, the labor market appears to improve as initial unemployment insurance claims have dropped to 215,000 from the previous 223,000. This suggests a decline in jobless claims and a potential strengthening of employment. The housing sector presents mixed signals; while building permits in March increased to 1.482 million from February’s revised figure of 1.459 million, indicating potential future growth in housing, housing starts have decreased significantly to 1.324 million from 1.501 million the previous month. This drop in housing starts suggests a slowdown in current housing construction activity. Furthermore, the Manufacturing Business Outlook has shown a significant decline, moving from 12.5 points in March to -26.4 points in April, indicating a sharp contraction in manufacturing sentiment and potentially looming economic challenges. Retail trade figures reveal varied dynamics; March saw an increase in total retail trade to 1.4% from February’s 0.2%, suggesting growth in consumer spending. However, when excluding automobiles, retail activity dipped to 0.5% from 0.7%, and the Retail Trade Control Group decreased to 0.4% from a revised 1.3%, indicating a waning strength in some retail sectors.

These mixed economic indicators from the United States are likely to exert influence over USDCHF currency movements. With decreasing unemployment claims and an uptick in building permits signaling positive economic undertones, the USD might experience some support, which was observed in its recent rise of 0.7% to 0.81860. However, the decline in housing starts, dropping manufacturing sentiment, and mixed retail data could counterbalance this support by casting doubts on the sustainability of economic growth. The consolidation of the USDCHF suggests market participants remain cautious, with no major upcoming events likely to sway the currency significantly in the short term. With these mixed economic signals, USDCHF might remain range-bound as traders digest the varying implications of current U.S. economic data.

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What can we expect from USDCHF today?

USDCHF on Thursday rose 0.7% to 0.81860. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for USDCHF looks mixed as the pair is likely to consolidate above 0.81298 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.82313 or trades above daily pivot 0.81806. Break above could target R1 at 0.82367. While to the downside, we are looking at 0.81298 (S1) and daily low of 0.81244 as support levels. USDCHF need to break on either side to indicate a short-term bias. A break above 0.82313 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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