- USD/CHF maintains a mildly bullish outlook.
- US data front missed some expectations.
- Fed’s meeting next week can provide fresh impetus.
- Technically, bulls look active for another up wave.
The USD/CHF weekly outlook remains mildly bullish as the pair managed to post 2-week highs just under mid-0.92. However, the pair lost steam as the US Dollar lost some traction during the week.
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The US data front saw some downturn as figures missed expectations. It resulted in increasing speculation of slow economic growth. Weekly unemployment claims came higher than expected at 419k while housing-related data release was also dismal.
On the other hand, coronavirus cases in the US are on a rise, threatening economic recovery. Fed already started overthinking about the tapering. Federal Reserve has to meet on July 28. Market participants are looking for hints about monetary policy tightening. It is worth noting that tapering is the first step of policy normalization.
Fed members have already said that a rate hike is not possible until they are done with asset purchase. Nothing much is expected from the meeting but investors are looking for September announcements.
What to watch next week for USD/CHF?
The next week comes with two major events. CB consumer confidence data is expected on Tuesday. The figures are no expected to surprise the market.
Second is the US federal funds rate and FOMC statement due on Wednesday. We have to look for the tone of FOMC in their statement. On Friday, we have personal spending and income data as well which includes PCE inflation as well. PCE inflation is a hot variable of inflation measure for the Fed.
USD/CHF weekly technical outlook: Bulls to trigger another up wave
The USD/CHF pair is consolidating in a broad range of 200 pips. The bulls look like gathering pace for another upside wave. The price is lying above congestion of 20 and 100 DMAs. The volume is also supportive of another bullish wave. However, the price has to clear the high of a widespread down bar of July 08 at 0.9263. The next hurdle is the higher end of consolidation at 0.9277.
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On the flip side, 0.9115, the lower end of consolidation acts as a support line. Just ahead of it, the band of 0.9150-0.9175 (20 and 100 DMAs) will serve as an interim support zone.
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