USD/CHF Comments – Ian Boersma

Disappointing US data today ended up magnifying the 1H/short-term bear bias I mentioned this morning in my analysis and the pair now hovers around 1.2507, after having dipped to a low of 1.2499.

Given the plethora of key data due out early on Tuesday morning, both from the Eurozone (German PPI and German and EU ZEW figures) and from the U.S. (PPI, Housing Starts and Building Permits), this pair has plenty of fundamental data from which to draw in order to make its next big move. In the meantime the pair will most likely go into consolidation mode until at least the EU data has been released, though the market reaction to that data may be muted until the US data can be fully digested, so I don’t expect any large moves from the Swissie until the New York session on Tuesday.

KEY LEVELS:

I am eyeing a close at or above the 1.2545 level in order to restore a near-term bull bias. For a much larger move, I am looking a close above 1.2604, as I mentioned in my morning analysis.

A close and sustained break below the 1.2500 level will keep the near-term bias bearish, with a much deeper move down possible if we get a close below 1.2432.

I continue to maintain a medium and long-term bull bias, as the Daily chart Ichimoku signals are all aligned ‘bull’ and price is in the early stages of a kijun-sen cross on the Weekly chart. However, the large bearish engulfing candle on the Daily is preoccupying and bears (no pun intended!) watching.

I’ll have more analysis on Tuesday morning.