FundamentalOverview

The USD got a boost fromthe FOMC decision as the market perceived it as morehawkish than expected. Overall, apart from some slight tweaks, the Fed matchedthe market’s pricing. Nonetheless, the market reacted in a big way pushingTreasury yields higher and giving the USD a tailwind.

The data is what reallymatters now as it will decide what the Fed is going to do. They switched theirfocus on inflation again, so it will likely take just one soft CPI report inJanuary to see the market reacting in a dovish way sending Treasury yields andthe US Dollar lower.

On the CHF side, the SNBcut interest rates by 50 bps bringing the policy rate to 0.50% and dropped thelanguage signalling further cuts in the coming quarters. This suggests that thecentral bank will likely slow the pace of easing which is something that themarket was already expecting with two 25 bps cuts priced in for next year.

USDCHFTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDCHF extended the rally into the 0.90 handle following the FOMCdecision but eventually erased most of the gains. From a risk management perspective,the buyers will have a better risk to reward setup around the trendline. The sellers, on the other hand,will want to see the price breaking lower to increase the bearish bets into the0.87 handle next.

USDCHF TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that we have another minor upward trendline defining the current bullishmomentum on this timeframe. The buyers will likely keep on leaning on it with adefined risk below it to position for new highs, while the sellers will lookfor a break lower to pile in for a pullback into the major trendline.

USDCHF TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a minor counter-trendline defining the current pullback intothe minor trendline. The buyers will want to see the price breaking above thecounter-trendline to increase the bullish bets into the 0.9050 level, while thesellers will likely lean on it to position for the break below the minortrendline and target the major trendline. The red lines define the average daily range for today.

UpcomingCatalysts

Today, we conclude the week with the US PCE data.