Majors are stuck in ranges ahead of the FOMC minutes release later today.
Can this catalyst spur a bounce for USD/CHF?
Before moving on, ICYMI, yesterday’s watchlist looked at CAD/JPY’s consolidation ahead of the Canadian CPI release. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Canada’s headline CPI stayed flat in January vs. estimated 0.3% m/m uptick and earlier 0.3% gain, annual CPI down from 3.4% to 2.9%
New Zealand GDT auction yielded 0.5 % uptick in dairy prices vs. earlier 4.2% gain
New Zealand Q4 2023 PPI input prices up 0.9% q/q vs. estimated 0.5% gain and earlier 1.2% increase, PPI output prices rose 0.7% q/q vs. 0.4% forecast and 0.8% previous
Australia’s MI leading index dipped 0.1% in January after staying flat previously
Japanese trade balance swung from 0.44 trillion JPY deficit to 0.24 trillion JPY surplus vs. estimated 0.23 trillion JPY deficit, as exports rose more than expected in January
Australian wage price index rose 0.9% q/q as expected in Q4 2023 vs. previous 1.3% increase
Price Action News
Overlay of AUD vs. Major Currencies Chart by TradingView
Aussie traders woke up on the right side of the bed today, thanks mostly to Australia’s quarterly wage index coming in line with estimates and the positive run in Chinese equity markets.
The Aussie chalked up gains across the board, except against the Kiwi which was enjoying additional support from stronger than expected quarterly PPI data.
On the flip side, the Loonie lagged far behind its comdoll buddies since Canada’s CPI figures fell short and dampened BOC hawkish bets.
Upcoming Potential Catalysts on the Economic Calendar:
FOMC member Bostic’s speech at 1:00 pm GMT
FOMC member Bowman’s speech at 6:00 pm GMT
FOMC meeting minutes at 7:00 pm GMT
New Zealand trade balance at 9:45 pm GMT
Australia’s flash manufacturing and services PMIs at 10:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
USD/CHF: 15-min
USD/CHF 15-min Forex Chart by TradingView
This dollar pair has been pacing back and forth inside a range, anxiously awaiting the release of the FOMC meeting minutes and what it might imply for U.S. interest rates.
Recall that the Fed kept rates on hold in their latest policy statement but pushed back on future rate cuts, suggesting that easing might not happen until the latter half of this year.
U.S. economic figures such as the CPI and NFP also supported a more optimistic economic outlook, keeping the dollar afloat on risk-off flows as well.
USD/CHF has found support around .8785 near S1 (.8790) and resistance at .8835, just below R1 (.8840).
The pair just bounced off the area of interest at the middle, which happens to line up with the pivot point level (.8815) and might be setting its sights back on support.
Technical indicators are looking mixed for now, as the 100 SMA crossed below the 200 SMA to signal that the path of least resistance is to the downside. In that case, there’s a chance USD/CHF could tumble below the bottom of the range and go for a move to S2 (.8760).
Then again, Stochastic is pulling higher to signal that buyers are in control, possibly allowing the range support to hold.
Either way, watch out for additional volatility during the release of the FOMC minutes, as price action could chop around before finding a clear direction.
