USDCHF Technical Analysis – The peak in rate cuts repricing weighs on the USD | Forexlive

Fundamental
Overview

The US Dollar continues to consolidate
around the highs as the market reached the peak in the repricing of interest
rates expectations and it will need stronger reasons to price out the remaining
rate cuts for 2025.

This was signalled by the
lack of US Dollar strength after lots of strong US data with the market’s
pricing remaining largely unchanged around three rate cuts by the end of 2025.
We might see the greenback remaining on the backfoot at least until the US CPI
due next week.

Yesterday, Fed’s
Waller and Fed’s
Williams sounded like a rate cut in December is basically a done deal with
the plan to slow the pace of rate cuts considerably in 2025. We will likely
need another hot CPI report to force them to skip the December cut.

On the CHF side, the Switzerland
CPI came in line with expectations today. The market continues to price in a
72% chance of a 25 bps cut in December and a total of 70 bps of easing by the
end of 2025.

USDCHF
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCHF continues to display a rangebound price action around the highs.
We have an upward trendline defining the bullish momentum on
this timeframe. We can expect the buyers to lean on the trendline with a
defined risk below it to position for a rally into the 0.9050 level next. The
sellers, on the other hand, will want to see the price breaking below the
trendline to start targeting new lows.

USDCHF Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a nice support zone around the 0.88 handle where the price
got rejected from several times in the past weeks. This adds confluence to the
trendline and should give the buyers more conviction to step in around those
levels. The sellers, on the other hand, will look for a break lower to gain
control and target a fall into the 0.87 handle.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we might have created a tighter range between the 0.8885 and the
0.8850 levels. The buyers will want to see the price breaking to the upside to
increase the bullish bets into the 0.9050 level next. The sellers will look for
a break below the bottom of the range to target a drop into the 0.88 support
zone. The red lines define the average daily range for today.

Upcoming
Catalysts

Today, we
get the US Job Openings data. Tomorrow, we have the US ADP, the US ISM Services
PMI and Fed Chair Powell speaking. On Thursday, we get the latest US Jobless
Claims figures. Finally, on Friday, we conclude the week with the US NFP
report.