USDCHF Technical Analysis – The trend has turned bearish

US:

• The Fed left interest rates unchanged as expected at the last meeting.
• The macroeconomic projections were revised higher,
  and the Dot Plot showed that the FOMC still expects another rate hike by the
  end of the year with less rate cuts projected in 2024.
• Fed Chair Powell reaffirmed their data dependency but added that
  they will proceed carefully.
• The US CPI beat expectations on the headline
  figures, but the core measures came in line with forecasts and the market’s
  pricing barely changed.
• The labour market remains pretty resilient as seen once again last
  week with the beat inJobless Claims, although continuing claims missed for a second
  time in a row.
• The US Retail Sales last week beat expectations by a big
  margin with positive revisions to the prior figures, suggesting the consumers’
  spending is still solid.
• Yesterday’s US PMIs showed that the economy now looks more
  balanced and resilient.
• Fed Chair Powelland other FOMC members continue to highlight the rise in long term yields as doing
  the job for the Fed and therefore they are expected to keep rates steady in
  November as well.
• The market doesn’t expect the Fed to hike anymore.

Switzerland:

• The SNB kept interest rates steady at 1.75% vs. 2.00% expected as the
  central bank sees the significant tightening in recent quarters countering the
  remaining inflationary pressures.
• The latest Switzerland CPI showed again that the inflation rate
  is comfortably in the SNB’s 0-2% target band for both the headline and core
  measures.
• The Unemployment Rate matched the previous reading hovering
  at cycle lows.
• The Manufacturing PMI saw a notable bounce back although
  it remains in contraction, while the Services PMI remain in expansion.
• The market expects the SNB to keep
  rates steady at the next meeting as well.

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the USDCHF pair
broke through the key support around
the 0.90 handle where we had also the 50% Fibonacci retracement level
and the trendline for confluence. The
sellers extended the drop into the 0.89 handle where the price bounced. The
trend now is bearish as the price has been printing lower lows and lower highs
and the moving averages have
crossed to the downside. The target should be the swing low around the 0.8746
level.

USDCHF Technical Analysis –
4-hour Timeframe

On the 4-hour chart, we can see that the price has
been diverging with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the price pulled back into the downward trendline but
got rejected. The sellers should step in around the trendline to position for
another drop into new lows, while the buyers will want to see the price
continuing higher to target the 0.90 resistance where we can find also the
38.2% Fibonacci retracement level for confluence.

USDCHF Technical Analysis –
1-hour Timeframe

On the 1-hour chart, we can see that we
had another divergence with the MACD that signalled an imminent pullback. The
price couldn’t break above the 0.8952 level as the sellers stepped in around
the trendline to fade the rally. The buyers will want to see the price breaking
above the 0.8952 level to confirm the rally into the 0.90 resistance, while the
sellers should increase their bearish bets if the price falls below the
trendline again.

Upcoming Events

Tomorrow we will see the latest US Jobless Claims data
with the market likely focusing on the Continuing Claims figures as they’ve
missed expectations two times in a row already and might be a signal that the
labour market is weakening. On Friday, we will get the US PCE report which is
unlikely to change anything for the Fed at this point in time.