UPDATE: The USDCHF currency pair has bounced back from recent cycle lows, sparked by positive comments from President Trump regarding China, as US Treasury yields rise. This development comes amid a mixed performance of the US dollar, driven by rapid shifts in market sentiment following Trump’s tariff threats.
The ongoing US government shutdown continues to obstruct the release of numerous key economic reports. The upcoming BLS US CPI report is set to be released today, October 13, 2023, despite the shutdown, making this a critical risk event for traders. Analysts emphasize that strong US labor market data is essential for sustaining the dollar’s upward momentum. If the CPI results are negative amidst tense US-China relations, the dollar’s strength could falter.
On the Swiss franc side, the Swiss National Bank (SNB) has maintained steady interest rates during its last meeting. SNB President Schlegel confirmed that the threshold for further rate cuts is extremely high, stating that recent negative inflation readings are insufficient for any drastic measures. The Swiss inflation rate remains well below the 2% target, leaving the CHF largely influenced by global risk sentiment.
Technical analysis indicates that the USDCHF pair recently broke below a significant upward trendline, reaching a low of 0.7872 before today’s rebound. If the USDCHF price rolls back down, buyers are expected to enter around the 0.7872 level, aiming for a rally toward 0.8073. Conversely, sellers will seek further declines, targeting new lows if the price breaks lower.
On the 4-hour chart, a downward trendline underscores the prevailing bearish momentum. Current trading is positioned slightly above this trendline, with sellers poised to capitalize on any price dips. Meanwhile, on the 1-hour chart, minor resistance has formed around 0.7935, where sellers may continue to exert pressure, while buyers will be looking for a breakout to bolster bullish positions.
With the focus remaining on the evolving US-China relationship, today’s US CPI results and flash PMIs will be pivotal in shaping market direction. Traders are advised to stay alert as these developments unfold, with significant implications for both the USD and CHF.
The immediate market response to Trump’s comments and the impending CPI report will be critical in determining the future trajectory of the USDCHF pair. Keep an eye on these updates, as they could significantly impact trading strategies and market sentiment in the coming days.
