Daily Forex News and Watchlist: USD/CHF

The Greenback has been on a steady climb over the past few trading sessions, so how long will the rallies last?

Will this near-term resistance level on USD/CHF keep gains in check?

Before moving on, ICYMI, yesterday’s watchlist looked at the Fibonacci levels on AUD/USD ahead of the U.S. ISM manufacturing PMI release. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

US ISM manufacturing PMI improved from 47.4 to 47.7 in February, short of the estimated 47.9 reading but still indicative of slower contraction in the industry

US ISM manufacturing prices index jumped from 44.5 to 51.3 vs. 45.5 forecast, reviving the stronger-than-expected inflation outlook

US crude oil inventories rose by 1.2 million barrels vs. estimated increase of 1.7 million barrels for the week ending February 24, as refineries operated at 85.8% of normal capacity

New Zealand overseas trade index rebounded by 1.8% q/q in Q4 after previous 3.9% slide instead of decreasing by the estimated 1.7%, exports up 20% from previous period

Japanese capital spending up by 7.7% q/y in Q4 vs. projected 7.2% increase but still lower than earlier 9.8% gain

Australian building approvals unexpectedly slump by 27.6% m/m in January vs. projected 7.1% dip and previous 15.3% gain

Japanese consumer confidence index ticked higher from 31.0 to 31.1 in February, short of estimated improvement to 32.1

Joblessness in Spain rose by 2.6K in February, lower than the estimated increase of 11.5K and previous 70.7K rise in unemployment

Price Action News

The U.S. dollar staged quite the turnaround, pulling higher after the ISM manufacturing PMI survey for February revealed a surge in the price component.

Since then, USD climbed steadily across the board over the next trading sessions as bonds once again took the spotlight, with the 10-year yield climbing to 4.00%.

The safe-haven currency also got an extra boost from mostly downbeat mid-tier reports, such as Australia’s surprise tumble in building approvals and the feeble uptick in Japan’s consumer confidence index, keeping traders wary of riskier holdings throughout the Asian session.

Forecasts of more Fed interest rate hikes from financial institutions like Goldman Sachs and Nomura also added to the dollar’s appeal.

Upcoming Potential Catalysts on the Forex Economic Calendar:

Eurozone flash headline and core CPI estimates at 10:00 am GMT
ECB monetary policy meeting accounts at 12:30 pm GMT
U.S. initial jobless claims at 1:30 pm GMT
RBNZ Governor Orr’s speech coming up
FOMC member Waller’s speech at 9:00 pm GMT
FOMC member Kashkari’s speech at 11:00 pm GMT
Tokyo core CPI at 11:30 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

Technical Chart of the Day: USD/CHF

Thanks to higher US bond yields and expectations of more Fed rate hikes, USD/CHF has been on the rise since bouncing off support at the .9350 minor psychological mark.

Not only did this take the pair up to the top of its ascending channel on the hourly time frame, but it also lifted price slightly beyond its average daily volatility of 76.2 pips.

Is it time for USD/CHF to retreat?

As you can see from the chart above, the channel resistance happens to coincide with the R1 of the pair’s standard Pivot Point, which means that sellers might be hanging out in the area.

If that’s the case and fundamentals align, USD/CHF could return its recent gains and retreat to the channel support close to the S1 and previous day lows.

I’d keep my eyes and ears peeled for any policy-related comments when FOMC members Waller and Kashkari give their testimonies later in the New York session.

Any attempt to downplay Fed tightening expectations could allow USD/CHF to turn lower, but highlighting the recent upside surprises in jobs and inflation figures could push the pair towards the next upside barriers at R2 and R3.