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USD/CHF Struggles Ahead of US CPI Report

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Technical analysis of Forex market

Key Highlights

  • USD/CHF corrected gains from the 0.9340 resistance zone.
  • There is a key bullish trend line forming with support near 0.9215 on the 4-hours chart.
  • EUR/USD is holding gains above 1.1400, and GBP/USD attempts to clear the 1.3600 resistance.
  • The US CPI could increase 7.3% in Jan 2022 (YoY).

USD/CHF Technical Analysis

The US Dollar failed to clear the 0.9350 resistance against the Swiss Franc. USD/CHF corrected lower below 0.9300, but dips were limited below the 0.9200 level.

Looking at the 4-hours chart, the pair traded as low as 0.9177 and started a fresh increase. There was a move above the 0.9220 resistance level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

However, the bears were active near the 50% Fib retracement level of the recent decline from the 0.9343 swing high to 0.9177 low.

To continue higher, the pair must surpass the 0.9260 resistance. The next major resistance is near the 0.9300 level. It coincides with the 76.4% Fib retracement level of the recent decline from the 0.9343 swing high to 0.9177 low.

A clear move above the 0.9260 resistance might start a major increase in the coming sessions. If not, there is a risk of a break below the 0.9200 support.

The next major support is near the 0.9180 level. Any more downsides might send the pair towards the 0.9100 level in the near term.

Looking at EUR/USD, the pair stayed above 1.1380 and might attempt a fresh rally. Similarly, GBP/USD could gain bullish momentum if it settles above the 1.3600 level.

Economic Releases

US Initial Jobless Claims – Forecast 230K, versus 238K previous.
US Consumer Price Index for Jan 2022 (MoM) – Forecast +0.5%, versus +0.5% previous.
US Consumer Price Index for Jan 2022 (YoY) – Forecast +7.3%, versus +7.0% previous.
US Consumer Price Index Ex Food & Energy for Jan 2022 (YoY) – Forecast +5.9%, versus +5.9% previous.