21.06.201817:44 Forex Analysis & Reviews: Fundamental Analysis of USD/CHF for June 21, 2018

Long-term review

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USD/CHF recently rejected off the 1.00 area after certain correction and volatility. USD has been the dominant currency in the pair whereas CHF is currently trying to recover its ground. The pair is to trade with the same dynamic in the coming days.

Recent rate hike in the US from 1.75% to 2.00% was a catalyst for USD rally against its rival currencies but the pressure could not sustain longer against CHF. Recent mixed economic reports for the US are assumed to be the only reason for the weakness against CHF. Today US Philly FED Manufacturing index was published with a significant decrease to 19.9 from the previous figure of 34.4 which was expected to be at 34.4, Unemployment Claims slightly decreased to 218k from the previous figure of 221k which was expected to be at 220k, HPI report was published unchanged at 0.1% which was expected to increase to 0.3%, and CB Leading Index report was also published with a decrease to 0.2% which was expected to be unchanged at 0.4%.

On the CHF side, today Trade Balance report was published with an increase to 2.76B from 2.24B which was expected to decrease to 1.89B. Additionally, SNB Financial Stability report was also published which was quite hawkish in its rhetoric, supporting the gains of CHF for a while. The stability report did include a higher risk and duties of banks of Switzerland for upcoming economic challenges which turned out to be quite optimistic for the future of CHF momentum.

As for the current scenario, the market is still quite USD-biased, but in light of solid reports CHF turned the table around, though CHF momentum is expected to be in the short or medium term. Until the US comes up with better economic reports to encourage a further USD rally against CHF, the bearish pressure or CHF gains are likely to continue.

Now let us look at the technical view. The price has rejected off the 1.00 area with a daily candle today. Having reached the dynamic level of 20 EMA, the pair has eased the impulsive pressure for a bit. The bearish pressure is currently struggling to sustain its momentum. However, as the price remains below 1.00 with a daily close, the bearish bias is expected to continue with a target towards 0.9850 and later towards 0.97 in the coming days.

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