USD/CHF looks like it’s ready for a big move ahead of the U.S. CPI release.
Which direction will it trade in the next couple of hours?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist checked out EUR/JPY’s Fib retracement levels ahead of the ECB’s policy announcement. Be sure to check that out to see if there is still a potential play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- Bank of Canada holds steady ahead of possible July taper
- U.S. crude stocks down, fuel inventories rise -EIA
- Biden to donate 500 million Pfizer doses, urge others to join in
- China’s crypto crackdown intensifies with new mining ban and censorship—but Bitcoin is rallying
- Leading crypto exchanges scout entry into India despite potential ban
- AU consumer confidence fades in response to Melbourne lockdown
- Japan’s producer prices rise by 0.7% in May
- Asian shares in tight range ahead of U.S. CPI, ECB meeting
- Dollar stuck near 5-month low as caution reigns ahead of U.S. CPI, ECB tests
Upcoming Potential Catalysts on the Economic Calendar:
- ECB’s policy announcement at 11:45 am GMT
- ECB’s press conference at 12:30 pm GMT
- U.S. May inflation numbers at 12:30 pm GMT
- U.S. initial jobless claims at 12:30 pm GMT
What to Watch: USD/CHF
USD/CHF is bouncing from the .8955 range support that hasn’t been broken since mid-May. In fact, the bulls just worked their butts off closing a candlestick that hit a .8925 low!Today’s U.S. CPI release just might give the dollar the boost it needs to continue trading in the range.
Markets expect consumer prices to rise at a slower pace in May after seeing a yuuuge jump in April. Leading indicators are seeing “unprecedented” levels, though, which opens the possibility of another month of upside inflation surprises.
If prices rise faster than what analysts had expected, then risk aversion and expectations of the Fed tapering or tightening sooner than expected could boost the U.S. dollar across the board.
But if today’s numbers result in dollar weakness, then USD/CHF could retest key support levels like .8925 or .8880.