Is the U.S. dollar getting its mojo back against its major counterparts?
Take a look at this 15-minute chart and see how likely it is for USD/CHF to find demand in the next trading sessions!
Before moving on, ICYMI, yesterday’s watchlist checked out GBP/USD’s ascending triangle setup ahead of the U.S. CPI release. 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:
U.S. CPI for September: 0.4% m/m (0.4% m/m forecast; 0.6% m/m previous); Core CPI 0.3% m/m (0.3% m/m forecast/previous)
U.S. weekly initial jobless claims for the week ending Oct. 7: 209K vs. 210K previous (revised higher from 207K)
EIA crude oil inventories were higher at 10.2M bbd in the week ending October 6 (vs. -0.4M expected, -2.2M previous)
BusinessNZ manufacturing index shrank from 46.1 to 45.3 in September and marked the lowest non-COVID-affected month since May 2009
China’s consumer prices were flat in September (vs. 0.2% uptick expected, 0.1% increase in August)
China’s producer prices fell by 2.5% y/y in September (vs. -2.4% expected, -3.0% previous)
China’s trade surplus widened from $68.4B to $77.7B in September even as both exports (-6.2% y/y) and imports (-6.2% y/y) slowed down their declines
Switzerland’s producer prices dipped by 0.1% in September (vs. 0.2% expected, -0.2% previous)
France’s final CPI confirmed at -0.5% m/m (+4.9% y/y) in September; decline is mainly due to lower service prices
Price Action News
Overlay of NZD Pairs 15-min
Another day, another chance to sell “risky” bets like the New Zealand dollars!
The U.S. dollar spent the Asian and early London session trading paring even more of its near-term gains against its major counterparts…
…except for NZD! In fact, the New Zealand dollar extended its intraweek downtrend more aggressively than other “risky” currencies like AUD and GBP did.
One possible explanation is China’s tepid trade and inflation data not doing risk-takers a lot of favor today.
As of writing, NZD is down the most against GBP and CHF and has lost the least pips against USD and JPY.
Upcoming Potential Catalysts on the Economic Calendar:
Eurozone industrial production at 9:00 am GMT
ECB President Lagarde to give a speech at 1:00 pm GMT
FOMC member Harker to give a speech at 1:00 pm GMT
U.S. preliminary UoM consumer sentiment at 2:00 pm GMT
U.S. preliminary UoM consumer inflation expectations at 2:00 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 Forex Chart by TradingView
Missed yesterday’s U.S. CPI event? Don’t worry, we may get another chance to trade a pro-dollar party when Uncle Sam prints its preliminary University of Michigan consumer sentiment and inflation expectations.
Fed members have been known to take the UoM reports when considering their monetary policies so you should too!
Analysts are expecting slight downticks in consumer inflation expectations for September. Based on yesterday’s CPI reports, though, we could still see upside surprises.
Hotter-than-expected inflation expectations may give the dollar’s rally another boost. This would make it easier for USD/CHF to bounce from its current levels.
And why not? The pair looks ready to jump from the .9050 minor psychological and Pivot Point level in the 15-minute time frame.
It also doesn’t hurt that .9050 is not far from a 38.2% Fibonacci retracement level as well as the 100 SMA on the chart.
If USD/CHF finds enough buying pressure from .9050, then the pair could revisit its highs near .9080 if not the .9100 psychological level.
But if U.S. session traders take their cues from their Asian and London session counterparts, then USD/CHF may continue its downswing and finish the week closer to the .9030 or .9020 potential inflection points.
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