USD/CHF is currently quite impulsive under the bullish momentum which lead the price to the edge of the 0.9950 resistance area. The US economy has been stronger than in Switzerland which is facing a downturn recently. However, there are signs of revival in the Swiss economy in the medium term.
The US economy with ongoing steady inflation rates along with the solid labor market is thriving. Despite some headwinds like a slowdown in the global economic growth, USD is expected to sustain the bullish momentum over CHF in the coming days. Citing FED's official Quarles, consumer inflation is very well contained and data on GDP growth is also quite positive. On the whole, firm fundamentals are going to ensure healthy economy in the future. After raising the interest rate 4 times last year, this year FED Chair Powell is going to take a patient approach with at least 2 rate hikes which are currently being discussed. According to FED's Charles Evans, a pause in rate hikes is crucial amid looming uncertainty. Recently Philly FED Manufacturing Index report was published with a significant increase to 17.0 from the previous figure of 9.4 which was expected to be at 9.7 and Unemployment Claims report was published with a positive result of a decrease to 213k from the previous figure of 216k which was expected to increase to 219k.
On the CHF side, according to Swiss National Bank Chairman Thomas Jordan, "BREXIT without a deal could hurt international trade and trigger turbulence on the currency markets and hit Switzerland as well. In the current situation, if Brexit is done with a deal it might create certain volatility but will not impact the international market, but without a deal can lead to severe shock in the international trade which may shock the Switzerland economy as well. Though uncertainty is increasing, monetary policy will not be changed recently". Moreover, today Switzerland PPI report is going to be published which is expected to increase to -0.1% from the previous value of -0.3%. If published better or as expected, then certain CHF gains may be observed but on a short-term basis.
Meantime, the US economy is currently on a sound footing. As a result, USD is expected to sustain the bullish momentum over CHF, thus generating more upward pressure in the coming days.
Now let us look at the technical view. The price is currently residing at the edge of 0.9950 area amid strong bullish pressure and daily close which ensures more bullish pressure in the coming days. As the price remains above 0.9850 area with a daily close, the bullish bias is expected to push the price higher towards 1.0130-50 resistance area in the future
SUPPORT: 0.9700, 0.9850
RESISTANCE: 1.0050, 1.0130-50
BIAS: BULLISH
MOMENTUM: IMPULSIVE and NON-VOLATILE
