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The U.S. is printing the Fed’s preferred inflation gauge so you know we’re looking at dollar pairs today!

How do you think USD/CHF will react to the report’s release?

Before moving on, ICYMI, yesterday’s watchlist checked out CAD/JPY’s sideways movement for breakout opportunities. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Germany to spend 200B EUR to cap soaring energy costs

China’s yuan snaps eight-day losing streak after strong PBOC warning

Liz Truss to hold meeting with OBR amid market alarm at mini-budget

New Zealand building permits sink 1.6% on month in August

Japan’s Aug. unemployment rate falls to 2.5% as expected, job availability rises

Japan’s industrial output climbs 2.7% on month (vs. -0.2% expected) in August

Japan’s annual retail sales up from 2.4% to 4.1% in Aug

China’s manufacturing PMI expands (50.1) in Sept vs. 49.4 reading in Aug

China’s non-manufacturing PMI lower from 52.6 to 50.6 in Sept

Japan’s consumer confidence weakens from 32.5 to 30.8 in Sept

UK house prices stagnate for the first time since mid-2021 = Nationwide

French inflation unexpectedly eases by 0.5% as ECB weighs its next move

European shares climb on the last day of painful quarter

Upcoming Potential Catalysts on the Forex Economic Calendar:

Canada’s markets out on bank holiday
UK’s mortgage approvals at 8:30 am GMT
UK’s net individual lending at 8:30 am GMT
Eurozone’s flash CPI at 9:00 am GMT
Eurozone’s unemployment rate at 9:00 am GMT
US core PCE price index at 12:30 pm GMT
Revised UoM consumer sentiment at 2:00 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: USD/CHF

USD/CHF 1-hour Forex Chart

USD/CHF 1-hour Forex Chart

If you’ve been too busy watching other dollar pairs, you should know that this week’s dollar selling has pushed USD/CHF from its .9950 resistance zone.

In fact, the pair completed a Double Top pattern around the area and is now trading closer to the .9750 handle.

Let’s see if today’s U.S. core PCE price index report can send USD/CHF back to its uptrend.

Word around is that the Fed’s preferred inflation gauge will print a 0.5% monthly gain in August when it only saw a 0.1% uptick in July.

Faster-than-expected price increases will put the spotlight back on the Fed and its members’ plans to stick to multiple interest rate hikes until inflation trends change.

USD/CHF, which is trading near a 61.8% Fibonacci retracement level, 200 SMA, and a trend line support on the 1-hour time frame, can jump back up to the .9850 or .9900 previous inflection points.

I’m not discounting further dollar losses, however.

Lower-than-expected PCE price readings can accelerate the dollar’s intraweek downswings and drag USD/CHF below its trend line support.

If we see more USD-bearish momentum, then I’ll be on the lookout for possible dips to the .9700 and .9600 previous areas of interest.