Fundamental Analysis of USD/CHF for February 8, 2019 - ConsultFX

Fundamental Analysis of USD/CHF for February 8, 2019

USD has been the dominant currency in the pair while CHF struggled to maintain the bearish momentum after the price broke above 0.9850 with a daily close. The US FED has been pleased about the recent economic growth in the US that enabled USD to dominate CHF.

Recently Switzerland's Foreign Currency Reserves report showed an increase to 741B from the previous figure of 729B. The positive Foreign Reserve report helped the currency to gain momentum against USD leading to certain correction in the pair. Recently US bank Goldman Sachs is holding talks with the Swiss Market watchdog over possible entering the country's mortgage market. If this step is accepted, the Swiss economy may turn quite volatile for several months.

On the USD side, today FED President of St. Louis Mr. James Bullard stated that the FED is currently trying to tame inflation downward as the inflation target has been already met, but higher inflation than this may affect the economy in the future. Moreover, recently US Unemployment Claims report was published with a decrease to 234k from the previous figure of 253k which unfortunately could not meet the expectation of decreasing to 220k. Ahead of Federal Reserve Chairman Powell's testimony on the state of the economy on 26th February, USD is expected to trade with higher volatility with the gains in the coming days.

Meanwhile, CHF managed to gain certain momentum over USD, blocking the impulsive bullish pressure established recently in the pair. CHF is expected to keep momentum.

Now let us look at the technical view. The price has formed Bearish Divergence recently while sitting at the edge of 1.00 area from where the price is expected to push lower towards 0.9850 support area in the coming days. As the price remains below 1.0050 resistance area with a daily close, the bearish pressure is expected to push lower in the coming days.

SUPPORT: 0.9850, 0.9950





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