Today’s parade of lower-tier U.S. reports means we gotta pay closer attention to USD pairs!
What do you think of USD/CHF seeing a short-term retracement?
Before moving on, ICYMI, yesterday’s watchlist looked at NZD/USD’s previous inflection point for a possible long opportunity. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
On Monday, ECB President Lagarde restated that the level of interest rates will stay restrictive for as long as needed to slow down high inflation
FOMC member Kashkari shared that he’s “one of those folks” who favor higher and higher for longer interest rates
PBOC set its USD/CNY onshore reference rate at 7.1727, a record 1,447 points higher than the market-estimated 7.3174
Japan’s services producer price index accelerated from 1.7% y/y to 2.1% y/y in August
BOJ’s core CPI maintained its 3.3% y/y growth (vs. 3.2% expected) in September
Price Action News
There were no top-tier reports to cause one-directional moves among the major currencies but we did see a bit of action earlier today.
AUD and NZD, in particular, dropped in early London session trading as traders worried about high-interest rates possibly derailing economic recoveries.
Risk sentiment quickly recovered, however, as focus turned to the leveling of USD demand and discussing the possibility of seeing weak but positive growth in the short term.
For now, NZD is trading higher against AUD, CAD, and GBP but still slightly lower against USD, JPY, EUR, and CHF.
Upcoming Potential Catalysts on the Forex Economic Calendar:
China’s CB leading index at 1:00 pm GMT
U.S. S&P house price index at 1:00 pm GMT
U.S. CB consumer confidence at 2:00 pm GMT
U.S. new home sales at 2:00 pm GMT
U.S. Richmond manufacturing index at 2:00 pm GMT
FOMC member Michelle Bowman to give a speech at 5:30 pm GMT
BOJ’s meeting minutes at 11:50 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
USD/CHF: 15-min
In case you missed it, U.S. dollar demand took a chill pill earlier today as traders focused on the possibility of seeing low but still positive growth for the major economies despite a high interest rate environment.
USD/CHF turned lower around the R1 (.9150) Pivot Point level and minor psychological handle and is now trading closer to the 15-minute chart’s 100 SMA.
Has USD/CHF seen its intraday lows?
Later today, Uncle Sam will print lower-tier reports such as the CB consumer confidence, S&P house price index, new home sales, and Richmond manufacturing index.
If the reports print lower figures as the markets are expecting, then we could see further USD losses that could take USD/CHF to lower inflection points like .9100.
But if the reports surprise to the upside, or if U.S. session traders go back to pricing in the Fed’s hawkishness, then we could see USD/CHF extend its days-long uptrend.
We already know that Stochastic is favoring an “oversold” signal while USD/CHF is hanging out near a previous resistance and support zone.
USD/CHF could bounce higher and retest its .9150 intraday highs. It could even see new weekly highs if there’s enough bullish momentum for USD!
