USDCHF Weekly Forex Forecast – 24th to 28th Sept 2018
Fundamentals Outlook
The week ahead is expected to be relatively quiet for the most part. Data from the Eurozone will cover second tier data. German Ifo business climate will shed light on the business conditions for the Eurozone’s largest economy. In the U.S. the Federal Reserve’s monetary policy meeting will be the main event to watch for. The FOMC meeting is due for Wednesday. The markets have fully priced in a rate hike at this week’s meeting. Forward guidance will be crucial for the markets looking ahead.
The recent flat print in inflation is starting to stoke concerns on whether the Fed will be able to raise rates for the fourth time this year. The Fed Chairman, Powell will be holding a press conference later in the day. The ECB will be releasing its monetary policy meeting minutes later on Thursday. Given that there were no major policy decisions taken at the recent meeting, the minutes are unlikely to impact the markets much. From Japan, the BoJ’s core inflation data and housing starts will dominate the headlines. Data from Switzerland is quiet for the week ahead.
Chart set up:
The USDCHF currency pair closed bearish last week after the previous two weeks showed an indecision pattern in the chart. The strong bearish price action is expected to be maintained for the week ahead as well, albeit for a modest bounce to the upside.
Key support/resistance levels:
Support: 0.9649; Resistance: 0.9461
Commentary:
After USDCHF lost the handle near 0.9649, price action extended declines lower. By Friday’s close price action was seen posting a strong doji pattern. This potentially indicates a near term upside. We expect the resistance level at 0.9649 will now be retested while the bias remains to the downside. The lower support at 0.9461 will be the most likely downside target that will be tested over the week. For the week ahead, USDCHF is expected to be bearish.
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