Got a couple of potential catalysts coming up for the franc today!
Is USD/CHF about to bounce off this short-term area of interest?
Before looking at the chart setup, let’s review the top headlines that moved the markets in the last couple of hours:
- U.S. Q4 2020 GDP upgraded from 4.0% to 4.1% vs. 4.2% consensus
- U.S. core durable goods orders rose 1.4% vs. 0.6% forecast
- U.S. headline durable goods orders up 3.4% vs. 0.9% forecast
- U.S. initial jobless claims at 730K vs. 828K forecast, 841K previous
- U.S. pending home sales fell 2.8% vs. projected 0.2% uptick
- Fed official Bostic not worried about changes in bond yields
- Fed official Bullard: Rising yields “appropriate” considering growth and inflation improvements
- Fed official George: Rise in yields reflects optimism in recovery strength
- RBNZ head Orr: NZD near fair value, negative rates an option
- Tokyo core CPI fell 0.3% vs. projected 0.4% drop
- Japanese preliminary industrial production up 4.2% vs. 3.9% forecast
- Japanese retail sales fell 2.4% vs. expected 2.6% slump
- Australian private sector credit rose 0.2% vs. expected 0.3% gain
Upcoming Potential Catalysts on the Economic Calendar:
- German import prices at 7:00 am GMT
- French consumer spending, preliminary CPI and GDP at 7:45 am GMT
- Swiss KOF economic barometer and GDP at 8:00 am GMT
- BOE MPC member Ramden’s testimony at 12:30 pm GMT
What to Watch: USD/CHF
A break-and-retest setup seems to be forming on the 1-hour chart of USD/CHF, as the pair is dipping close to a rising trend line that coincides with an area of interest.Bulls might be hanging out around the .9000 major psychological level that’s in line with the 61.8% Fib and a former resistance zone.
Data due from the Swiss economy, namely the KOF economic barometer for this month and the Q4 2020 GDP reading, might determine whether or not the franc is in for another set of losses.
A flat GDP reading is expected, following the earlier 7.2% expansion, while the KOF figure might stay unchanged at 96.5. Weaker than expected results could allow USD/CHF to recover to the swing high right away while strong figures might lead to a larger correction.
Note that the latest batch of data from the U.S. economy has been mostly upbeat but that the drop in Treasury yields has been a drag on the dollar.