USDCHF rises into a key resistance as traders turn their focus to the US NFP report

KEY POINTS:

• US dollar remains supported despite mixed US data
• Traders turn their focus to the US NFP report for the next direction
• Swiss CPI matches estimates, SNB seen on hold for a long time
• USD/CHF rises into a key resistance near the 0.80 handle

FUNDAMENTAL OVERVIEW

USD:

The US dollar has been
bouncing around in the past few days as traders continue to wait for the US NFP
report. The US data this week has been mixed. We got a soft ISM Manufacturing
PMI on Monday but a strong Services PMI yesterday. The ADP was good despite a
slight miss, but Job Openings were soft.

In terms of macro, nothing
has changed. The market is still pricing 62 bps of easing by year-end with 57%
probability of a Fed cut coming in March at the earliest. We will need very
soft NFP and CPI data to force the Fed to cut at the upcoming meeting,
otherwise traders will just adjust the timing of the expected cuts in 2026 and
might even increase bets in the case of weak data.

Tomorrow, the US Supreme
Court scheduled an “opinion day”, so we might also potentially get a decision
on Trump’s tariffs.

CHF:

On the CHF side, nothing
has changed. The SNB left everything unchanged at the last meeting and sounded
a bit more positive on the future outlook given the lower US tariff rate. SNB’s
members continue to repeat that the bar for negative rates remains high, so
that leaves the Swiss Franc trading mostly based on risk sentiment.

The Swiss
CPI today matched expectations with the Core reading holding steady around
0.5%. Unless we get a strong negative shock in the economy or outright
deflation, the SNB is unlikely to do anything for a long time.

USDCHF TECHNICAL
ANALYSIS – DAILY TIMEFRAME

On the daily chart, we can
see that USDCHF bounced from the bottom of the range around the 0.7970 level
and it’s now approaching the 0.80 handle. There’s not much we can glean from
this timeframe, so we need to zoom in to see some more details.

USDCHF TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME

On the 4 hour chart, we can
see that we have an important zone around the 0.7980 level where the price got
rejected from several times in the past several months. This is where we can
expect the sellers to step in with a defined risk above the zone to position
for a drop into the bottom of the range. The buyers, on the other hand, will
want to see the price breaking higher to increase the bullish bets into the top
of the range around the 0.81 handle.

USDCHF TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME

On the 1 hour chart, we can
see that the price has been trading inside a rising channel into the key
resistance. The RSI has been diverging with the latest push into the resistance
indicating a loss of momentum. This might be a signal for a bigger pullback
into the trendline around the 0.7930 level.

The buyers will likely
continue to lean on the bottom of the channel to keep pushing into new highs,
while the sellers will look for a break lower to increase the bearish bets into
the major trendline. The red lines define the average daily range for today.

UPCOMING CATALYSTS

Today we get the latest US Jobless Claims figures. Tomorrow, we conclude the
week with the US NFP report and potential US Supreme Court decision on Trump’s
tariffs.