Technical Outlook: USDCHF closed the week on a bearish note at 1.0089 on Friday. This came after price rallied back higher above 1.0227 before giving up its gains. Price action in USDCHF remains volatile at best, but the current pace of declines suggests a potential smooth trend that could be starting. The Stochastics on the daily chart remains in oversold level which is something to keep in mind. USDCHF is showing signs of forming a possible hear and shoulders pattern near the current level. Watch for a bounce near the potential neckline support forming at 1.00604. A bounce off this level could see USDCHF rally back to 1.0188. If we get to see a reversal in the price zone of 1.0188 – 1.0227, then this would confirm the right shoulder and confirms the downside target to 0.9934. The trade would be invalidated if USDCHF rallies above 1.0307.
Fundamental Outlook: A rather quiet week for Switzerland with only PPI figures coming out this week. Most of the heavy lifting will therefore come from U.S. data which will see key releases including inflation figures for December. Economists forecast a 0.3% increase on headline CPI on a month over month basis, which will push the year over year inflation rate towards 2.1%. A beat on the estimates and a year over year increase in headline inflation above the 2.0% threshold would simply mean increase the expectations of the Fed tightening its monetary policy even further.
Previous USDCHF Weely Forex Forecast
USDCHF Weekly Forex Forecast – 16th to 20th Jan 2017 – Bearish
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