Chart of the Day USDCHF

Chart of the Day USDCHF

Chart of the Day USDCHF

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Pivotal Test USDCHF

Global risk appetite was fairly buoyant overnight, with S&P500 at a fresh record high, led by tech stocks including chipmakers after news that China is planning stimulus measures and could bailout troubled industries. The USD also saw a four month high amid stronger than expected housing starts and building permits data. UST bonds softened slightly. The January FOMC minutes reinforced that the current policy stance will “remain appropriate for a time” and also highlighted plans to start moderating Treasury bill purchases in 2Q and several members favour a standing repo facility going forward.

The SNB remains uncomfortable with Franc appreciation and continues to remind the market it will need to be careful about any attempts at trying to force an appreciation in the currency. But the SNB will also need to be careful right now, as its strategy to weaken the Franc is facing headwinds from a less certain global outlook, and from a US administration that has put Switzerland on its currency manipulator watchlist. Any signs of risk liquidation in 2020, will likely invite a very large wave of demand for the Franc that will put the SNB in the more challenging position of needing to back up its talk with action, that ultimately, may not prove to be as effective as it once was, given where we’re at in the monetary policy cycle.

From a technical and trading perspective, the USDCHF is testing the Yearly pivot point at 98.50. This also coincides with the monthly volume weighted average price (VWAP) which remains negatively oriented for now. Price is also testing key Fibonacci time and price retracement levels along with horizontal structural resistance, the balance of probabilities is building for some corrective price action in the USDCHF, bears will be looking for a close below the near term VWAP to flip the daily chart bearish and portend a pullback to test bids appetite back towards the 97.00 handle

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

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