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SWITZERLAND: 50-Day EMA Underpins USDCHF Recovery, US & Swiss CPI Awaited

SWITZERLAND
CEEMEASwitzerlandBulletMarketsFixed Income BulletsForeign Exchange Bullets
  • USDCHF is rising for the fourth consecutive trading session on Tuesday, having extended its firm recovery from 50-day EMA support last week. This average continues to provide significant support for the pair, with the pair unable to close back below since prior to the US election despite multiple attempts in recent weeks. It currently intersects at 0.9017 and remains the key short-term technical parameter.
  • The volatility of the Japanese yen remains a focus for G10 currency markets, evidenced by the intra-day ranges that continue to push 1% on a frequent basis. However, with a developing hawkish BOJ narrative bolstering recent Yen gains, USDCHF could provide a cleaner expression of any renewed greenback strength in coming sessions.
  • Bolstering this point, we have both US and Swiss inflation data across Wednesday/Thursday which should keep the market’s attention on USDCHF relatively high this week. A confirmation of the diverging central bank stances would place the focus back on the most recent highs around 0.9200, coinciding with strong trendline resistance drawn across the 2023 and 2024 highs. Above here, 0.9244 remains the key medium-term target for the rally.
  • Interestingly, straddle pricing for a Thursday expiry is showing very little additional premium for these event risks, leaving markets to break-even on a ~50 pip move. This perhaps bolsters the case that 0.9200 could cap any bullish short-term extension this week, subject to broader tariff related developments.
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  • USDCHF is rising for the fourth consecutive trading session on Tuesday, having extended its firm recovery from 50-day EMA support last week. This average continues to provide significant support for the pair, with the pair unable to close back below since prior to the US election despite multiple attempts in recent weeks. It currently intersects at 0.9017 and remains the key short-term technical parameter.
  • The volatility of the Japanese yen remains a focus for G10 currency markets, evidenced by the intra-day ranges that continue to push 1% on a frequent basis. However, with a developing hawkish BOJ narrative bolstering recent Yen gains, USDCHF could provide a cleaner expression of any renewed greenback strength in coming sessions.
  • Bolstering this point, we have both US and Swiss inflation data across Wednesday/Thursday which should keep the market’s attention on USDCHF relatively high this week. A confirmation of the diverging central bank stances would place the focus back on the most recent highs around 0.9200, coinciding with strong trendline resistance drawn across the 2023 and 2024 highs. Above here, 0.9244 remains the key medium-term target for the rally.
  • Interestingly, straddle pricing for a Thursday expiry is showing very little additional premium for these event risks, leaving markets to break-even on a ~50 pip move. This perhaps bolsters the case that 0.9200 could cap any bullish short-term extension this week, subject to broader tariff related developments.
image