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USD CHF - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE Hawkish Fed policy remains a key driver for Dollar strength. With headline inflation >9%, the Fed has been pressured to tighten policy aggressively, hiking rates by 75bsp at their June meeting, and continuing with Quantitative Tightening. However, as a result of increasing fears of a growth slowdown (as evidenced by recent econ data), STIR markets have repriced lower, and now expects a terminal rate of 3.5% (versus >4% before the June FOMC meeting). Even though lower STIR pricing should be negative for the USD, the growth concerns has sparked further risk off concerns and have seen safe haven flows into the USD. The USD is usually inversely correlated to the global economy and trade, appreciating when growth & inflation slows and depreciates when growth & inflation accelerates. Further expectations of a cyclical slowdown and continued tight monetary policy expectations has seen investors shun risk assets and even bonds (usually considered a safe haven), and the USD has been a key benefactor of the rush to safety in recent weeks. The current high inflation has meant that bonds have not been sought as a safe haven with a strong stock-to-bond correlation, and this has caused big bond outflows. With bonds not fulfilling its usual save haven role the USD has been the haven of choice. The bias remains bullish , but with stretched tactical and CFTC positioning we don’t want to chase the USD higher right now. POSSIBLE BULLISH SURPRISES As aggressive Fed policy has been supporting the USD, any incoming data ( S&P Flash PMI this week) that sparks further aggressive hike expectations, or comments from FOMC members that signals even more aggressive policy could trigger bullish reactions in the USD. As the cyclical outlook for the global economy is very bleak, and the USD is considered a safe haven, it means incoming data that exacerbates fears of recession and triggers a big rush to safety could trigger bullish USD reactions. Further outflows in US bonds means more USD safe haven appeal. So, watching key triggers for further upside in bond yields like rising commodity prices, rising inflation expectations and upside surprises in inflation data could also trigger further USD bullish reactions. POSSIBLE BEARISH SURPRISES The USD has been reacting as a safe haven with recent US data, but the worse growth data gets, the higher likelihood of a ‘Fed Put’ in the months ahead. Thus, extremely bad growth data could trigger bearish reactions in the USD. Tactically the USD is trading at fresh cycle highs, and aggregate CFTC positioning is close to prior highs which acted as local tops. Thus, stretched positioning could make the USD vulnerable to mean reversion in the short-term, but finding strong enough bearish catalysts has been tricky recently. With a lot already priced for the Fed, it won’t take much for them to disappoint markets on the dovish side. Any FOMC comments that suggests more concern about the economy than inflation could trigger bearish reactions in the USD, but with inflation so high any dovish pivots seem unlikely for now. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays aggressive and cyclical concerns put pressure on risk assets. We do also want to be mindful that lots has been priced for the USD, and as growth deteriorates, it could start to weigh on the USD if markets start pricing in a ‘Fed Put’, but based on where inflation is sitting any pivot seems still a while away and as the safe haven of choice any further recession focused downside in risk assets will likely continue to prove supportive for the USD. In the short-term though, with positioning looking stretched, we prefer much deeper pullbacks for new med-term USD longs and would look for short-term catalysts that offer shorter bearish sentiment trades against the current strong bull trend. CHF FUNDAMENTAL OUTLOOK: WEAK BULLISH BASELINE The CHF has been supported in recent months as STIR markets have steadily priced in higher interest rates for Switzerland, as well the SNB’s reluctance to intervene in the currency markets to try and weaken the CHF. At their June meeting, the SNB took a very aggressive policy step by hiking rates with 50bsp and removing their previous classification that the CHF is ‘highly valued’. Unlike other central banks, the SNB has chosen to try and tackle inflation before it runs rampant by hiking rates aggressively. Their hike in June was the first hike since 2007, and if the bank follows through with a hike in September it will mean Switzerland will have positive interest rates for the first time in almost a decade. There is scope for further CHF upside in the months ahead with 4 supporting drivers. SNB’s hawkish tilt, the bank’s acceptance of a stronger CHF with less intervention, negative underlying risk sentiment driven by the global cyclical slowdown, rising inflation . The SNB did note that they are willing to be active in the foreign exchange market to ensure appropriate monetary conditions which means too much CHF strength could get the wrong attention from the bank. POSSIBLE BULLISH SURPRISES Any incoming data (especially inflation coming up early on Monday) or SNB comments that causes markets to price in even more aggressive policy from the bank could trigger bullish reactions in the CHF. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bullish reactions in the CHF. The more aggressive markets think the ECB will be with incoming hikes, the more aggressive they will be for the SNB. Thus, data that trigger hawkish ECB expectations could also be supportive for the CHF. POSSIBLE BEARISH SURPRISES The SNB has not been as active in trying to devalue the CHF through sight deposits as they have been in recent years. With the bank now on a hiking cycle, any drastic appreciation could spark some intervention and would be a bearish catalyst. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bearish reactions in the CHF. Further lower repricing of ECB hikes could trigger downside in the CHF as well, and the biggest dovish risk for the currency is a big surprise miss on any incoming CPI data. BIGGER PICTURE The SNB surprised with a 50bsp hike and signalled, that unlike other central banks, they will not get behind the curve. Apart from a hawkish central bank , we also have the economy on a steady footing, as well as less risk of intervention as SNB’s Jordan said they no longer see the CHF as highly valued (there is of course risk that they could intervene if the CHF appreciates too much too fast). This means that the bias for the CHF has changed to bullish and we’ll be looking for big dips in the CHF for buying opportunities.
by thunderpips
USD CHF - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE Hawkish Fed policy remains a key driver for Dollar strength. With headline inflation >9%, the Fed has been pressured to tighten policy aggressively, hiking rates by 75bsp at their June meeting, and continuing with Quantitative Tightening. However, as a result of increasing fears of a growth slowdown (as evidenced by recent econ data), STIR markets have repriced lower, and now expects a terminal rate of 3.5% (versus >4% before the June FOMC meeting). Even though lower STIR pricing should be negative for the USD, the growth concerns has sparked further risk off concerns and have seen safe haven flows into the USD. The USD is usually inversely correlated to the global economy and trade, appreciating when growth & inflation slows and depreciates when growth & inflation accelerates. Further expectations of a cyclical slowdown and continued tight monetary policy expectations has seen investors shun risk assets and even bonds (usually considered a safe haven), and the USD has been a key benefactor of the rush to safety in recent weeks. The current high inflation has meant that bonds have not been sought as a safe haven with a strong stock-to-bond correlation, and this has caused big bond outflows. With bonds not fulfilling its usual save haven role the USD has been the haven of choice. The bias remains bullish , but with stretched tactical and CFTC positioning we don’t want to chase the USD higher right now. POSSIBLE BULLISH SURPRISES As aggressive Fed policy has been supporting the USD, any incoming data ( S&P Flash PMI this week) that sparks further aggressive hike expectations, or comments from FOMC members that signals even more aggressive policy could trigger bullish reactions in the USD. As the cyclical outlook for the global economy is very bleak, and the USD is considered a safe haven, it means incoming data that exacerbates fears of recession and triggers a big rush to safety could trigger bullish USD reactions. Further outflows in US bonds means more USD safe haven appeal. So, watching key triggers for further upside in bond yields like rising commodity prices, rising inflation expectations and upside surprises in inflation data could also trigger further USD bullish reactions. POSSIBLE BEARISH SURPRISES The USD has been reacting as a safe haven with recent US data, but the worse growth data gets, the higher likelihood of a ‘Fed Put’ in the months ahead. Thus, extremely bad growth data could trigger bearish reactions in the USD. Tactically the USD is trading at fresh cycle highs, and aggregate CFTC positioning is close to prior highs which acted as local tops. Thus, stretched positioning could make the USD vulnerable to mean reversion in the short-term, but finding strong enough bearish catalysts has been tricky recently. With a lot already priced for the Fed, it won’t take much for them to disappoint markets on the dovish side. Any FOMC comments that suggests more concern about the economy than inflation could trigger bearish reactions in the USD, but with inflation so high any dovish pivots seem unlikely for now. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays aggressive and cyclical concerns put pressure on risk assets. We do also want to be mindful that lots has been priced for the USD, and as growth deteriorates, it could start to weigh on the USD if markets start pricing in a ‘Fed Put’, but based on where inflation is sitting any pivot seems still a while away and as the safe haven of choice any further recession focused downside in risk assets will likely continue to prove supportive for the USD. In the short-term though, with positioning looking stretched, we prefer much deeper pullbacks for new med-term USD longs and would look for short-term catalysts that offer shorter bearish sentiment trades against the current strong bull trend. CHF FUNDAMENTAL OUTLOOK: WEAK BULLISH BASELINE The CHF has been supported in recent months as STIR markets have steadily priced in higher interest rates for Switzerland, as well the SNB’s reluctance to intervene in the currency markets to try and weaken the CHF. At their June meeting, the SNB took a very aggressive policy step by hiking rates with 50bsp and removing their previous classification that the CHF is ‘highly valued’. Unlike other central banks, the SNB has chosen to try and tackle inflation before it runs rampant by hiking rates aggressively. Their hike in June was the first hike since 2007, and if the bank follows through with a hike in September it will mean Switzerland will have positive interest rates for the first time in almost a decade. There is scope for further CHF upside in the months ahead with 4 supporting drivers. SNB’s hawkish tilt, the bank’s acceptance of a stronger CHF with less intervention, negative underlying risk sentiment driven by the global cyclical slowdown, rising inflation. The SNB did note that they are willing to be active in the foreign exchange market to ensure appropriate monetary conditions which means too much CHF strength could get the wrong attention from the bank. POSSIBLE BULLISH SURPRISES Any incoming data (especially inflation coming up early on Monday) or SNB comments that causes markets to price in even more aggressive policy from the bank could trigger bullish reactions in the CHF. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bullish reactions in the CHF. The more aggressive markets think the ECB will be with incoming hikes, the more aggressive they will be for the SNB. Thus, data that trigger hawkish ECB expectations could also be supportive for the CHF. POSSIBLE BEARISH SURPRISES The SNB has not been as active in trying to devalue the CHF through sight deposits as they have been in recent years. With the bank now on a hiking cycle, any drastic appreciation could spark some intervention and would be a bearish catalyst. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bearish reactions in the CHF. Further lower repricing of ECB hikes could trigger downside in the CHF as well, and the biggest dovish risk for the currency is a big surprise miss on any incoming CPI data. BIGGER PICTURE The SNB surprised with a 50bsp hike and signalled, that unlike other central banks, they will not get behind the curve. Apart from a hawkish central bank, we also have the economy on a steady footing, as well as less risk of intervention as SNB’s Jordan said they no longer see the CHF as highly valued (there is of course risk that they could intervene if the CHF appreciates too much too fast). This means that the bias for the CHF has changed to bullish and we’ll be looking for big dips in the CHF for buying opportunities.
by thunderpips
4
USD CHF - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE Hawkish Fed policy remains a key driver for Dollar strength. With headline inflation >8%, the Fed has been pressured to tighten policy aggressively, hiking rates by 75bsp at their June meeting, and continuing with Quantitative Tightening. However, as a result of increasing fears of a growth slowdown (as evidenced by recent econ data), STIR markets have repriced lower, and now expects a terminal rate of 3.3% (versus >4% before the June FOMC meeting). Even though lower STIRs should be negative for the USD, as a lot of hikes have been baked in, the growth concerns has sparked further risk off concerns and have seen safe haven flows into the USD. The USD is usually inversely correlated to the global economy and trade, appreciating when growth & inflation slows and depreciates when growth & inflation accelerates. Further expectations of a cyclical slowdown and continued tight monetary policy expectations has seen investors shun risk assets and even bonds (usually considered a safe haven), and the USD has been a key benefactor of the rush to safety in recent weeks. The current high inflation has meant that bonds have not been sought as a safe haven with a strong stock-to-bond correlation, and this has caused big bond outflows. With bonds not fulfilling its usual save haven role the USD has been the haven of choice. POSSIBLE BULLISH SURPRISES As aggressive Fed policy has been supporting the USD, any incoming data (this week’s CPI , consumer sentiment and retail sales) that sparks further aggressive hike expectations, or comments from FOMC members that signals even more aggressive policy could trigger bullish reactions in the USD. As the cyclical outlook for the global economy is very bleak, and the USD is considered a safe haven, it means incoming data that exacerbates fears of recession and triggers a big rush to safety could trigger bullish USD reactions. Further outflows in US bonds means more USD safe haven appeal. So, watching key triggers for further upside in bond yields like rising commodity prices, rising inflation expectations and upside surprises in inflation data this week could also trigger further USD bullish reactions. POSSIBLE BEARISH SURPRISES The USD has been reacting as a safe haven with recent US data, but the worse growth data gets, the higher likelihood of a ‘Fed Put’ in the months ahead. Thus, extremely bad growth data could trigger bearish reactions in the USD. Tactically the USD is trading at fresh cycle highs, and aggregate CFTC positioning is close prior highs which acted as local tops for the USD. Thus, stretched positioning could make the USD vulnerable to mean reversion in the short-term, but finding strong enough bearish catalysts has been tricky recently. With a lot already priced for the Fed, it won’t take much for them to disappoint markets on the dovish side. Any FOMC comments that suggests more concern about the economy than inflation could trigger bearish reactions in the USD, but with inflation so high any dovish pivots seem unlikely for now. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays aggressive and cyclical concerns put pressure on risk assets. We do also want to be mindful that lots has been priced for the USD, and as growth deteriorates, it could start to weigh on the USD if markets start pricing in a ‘Fed Put’ but based on where inflation is sitting any pivot seems still a while away and as the safe haven of choice any further recession focused downside in risk assets will likely continue to prove supportive for the USD. In the short-term though, with positioning looking stretched, we prefer much deeper pullbacks for new med-term USD longs and would look for short-term catalysts that offer shorter bearish sentiment trades against the current strong bull trend. CHF FUNDAMENTAL OUTLOOK: WEAK BULLISH BASELINE The CHF has been supported in recent months as STIR markets have steadily priced in higher interest rates for Switzerland, as well the SNB’s reluctance to intervene in the currency markets to try and weaken the CHF. At their June meeting, the SNB took a very aggressive policy step by hiking rates with 50bsp and removing their previous classification that the CHF is ‘highly valued’. Unlike other central banks, the SNB has chosen to try and tackle inflation before it runs rampant by hiking rates aggressively. Their hike in June was the first hike since 2007, and if the bank follows through with a hike in September it will mean Switzerland will have positive interest rates for the first time in almost a decade. There is scope for further CHF upside in the months ahead with 4 supporting drivers. SNB’s hawkish tilt, the bank’s acceptance of a stronger CHF with less intervention, negative underlying risk sentiment driven by the global cyclical slowdown, rising inflation. The SNB did note that they are willing to be active in the foreign exchange market to ensure appropriate monetary conditions which means too much CHF strength could get the wrong attention from the bank. POSSIBLE BULLISH SURPRISES Any incoming data (especially inflation coming up early on Monday) or SNB comments that causes markets to price in even more aggressive policy from the bank could trigger bullish reactions in the CHF. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bullish reactions in the CHF. The more aggressive markets think the ECB will be with incoming hikes, the more aggressive they will be for the SNB. Thus, data that trigger hawkish ECB expectations could also be supportive for the CHF. POSSIBLE BEARISH SURPRISES The SNB has not been as active in trying to devalue the CHF through sight deposits as they have been in recent years. With the bank now on a hiking cycle, any drastic appreciation could spark some intervention and would be a bearish catalyst. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bearish reactions in the CHF. Further lower repricing of ECB hikes could trigger downside in the CHF, and the biggest dovish risk for the currency is a big surprise miss in CPI BIGGER PICTURE The SNB surprised with a 50bsp hike and signalled, that unlike other central banks, they will not get behind the curve. Apart from a hawkish central bank, we also have the economy on a steady footing, as well as less risk of intervention as SNB’s Jordan said they no longer see the CHF as highly valued (there is of course risk that they could intervene if the CHF appreciates too much too fast). This means that the bias for the CHF has changed to bullish and we’ll be looking for big dips in the CHF for buying opportunities.
by thunderpips
2
Will USDCHF let dip buyers back in?USDCHF - Intraday - We look to Buy at 0.9781 (stop at 0.9758) Our short term bias remains positive. We are trading at overbought extremes. A lower correction is expected. We look to buy dips. 20 4hour EMA is at 0.9777. Our profit targets will be 0.9837 and 0.9847 Resistance: 0.9850 / 0.9870 / 0.9900 Support: 0.9820 / 0.9800 / 0.9780 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.'
Long
by OANDA
CHFJPY Testing the May's Higher LowsThe CHFJPY pair continues to be on a heavily bullish trend since the start of the year. The pull-back since the June 29 High, hit on Friday the Higher Lows trend-line (1) that started in May and is so far holding. As long as it does, the short-term trend is bullish towards the 2.5 Fibonacci extension and 146.000. A break below the Higher Lows (1) should immediately aim the 1D MA50 (blue trend-line), which is the medium-term Support. Closing below that level, initiates a much needed correction to the 1D MA200 (orange trend-line), which is untouched since October 01 2021. -------------------------------------------------------------------------------------------------------- Please like, subscribe and share your ideas and charts with the community! --------------------------------------------------------------------------------------------------------
Long
by TradingShot
USD CHF - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE Hawkish Fed policy remains a key driver for Dollar strength. With headline inflation >8%, the Fed has been pressured to tighten policy aggressively, hiking rates by 75bsp at their June meeting, and continuing with Quantitative Tightening. However, as a result of increasing fears of a growth slowdown (as evidenced by recent econ data), STIR markets have repriced lower, and now expects a terminal rate of 3.3% (versus >4% before the June FOMC meeting). As STIRs reprice lower, we are expecting that to act as a possible short-term negative driver for the USD. Even though lower STIRs should be negative for the USD, as a lot of hikes have been baked in, the growth concerns sparked further risk off concerns this past week, which supported the USD. The USD is usually inversely correlated to the global economy and trade, appreciating when growth & inflation slows and depreciates when growth & inflation accelerates (reflation). Further expectations of a cyclical slowdown and continued tight monetary policy expectations has seen investors shun risk assets and even bonds (usually considered a safe haven), and the USD has been a key benefactor of the rush to safety in recent weeks. Even though US bonds are considered safe havens, the current high inflation has seen a strong stock-to-bond correlation and has caused big bond outflows. With bonds not fulfilling its usual save haven role the USD has been the haven of choice. POSSIBLE BULLISH SURPRISES As aggressive Fed policy has been supporting the USD, any incoming data (this week’s ISM Services and NFP) that sparks further aggressive hike expectations, or additionally any comments from FOMC members that signals even more aggressive policy could trigger bullish reactions in the USD. As the cyclical outlook for the global economy is very bleak, and the USD is considered a safe haven, it means incoming data that exacerbates fears of recession and triggers a big rush to safety could trigger bullish USD reactions. Further outflows in US bonds means more USD safe haven appeal. So, watching key triggers for further upside in bond yields like rising commodity prices, rising inflation expectations and upside surprises in inflation data could also trigger further USD bullish reactions. POSSIBLE BEARISH SURPRISES Apart from this past week, the USD has reacted cyclically to incoming data which could suggest markets is shifting from safe haven focus to the rising risks of recession. The worse growth data gets, the higher likelihood of a ‘Fed Put’ in the months ahead. Thus, extremely bad ISM Services PMI or NFP data this week could trigger bearish reactions in the USD. Tactically the USD is trading at cycle highs, and aggregate CFTC positioning is close prior highs which acted as local tops for the USD. Thus, stretched positioning could make the USD vulnerable to mean reversion in the short-term. With a lot already priced for the Fed, it won’t take much for the Fed to disappoint markets on the dovish side. Any FOMC comments that suggests more concern about the economy than inflation could trigger bearish reactions in the USD BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays aggressive and cyclical concerns put pressure on risk assets. But we do want to be mindful that lots has been priced for the USD, and as growth deteriorates, we are expecting that the weigh on the USD if markets start pricing in a higher likelihood of a less hawkish Fed due to higher recession risks. The opposite side to that though is that further concerns about the economy sees more safe haven inflows into the Dollar. Positioning is stretched, so we would prefer much deeper pullbacks for new med-term USD longs and would look for short-term catalyst that offer shorter bearish sentiment trades against the current strong bull trend. CHF FUNDAMENTAL OUTLOOK: WEAK BULLISH BASELINE The CHF has been supported in recent months as STIR markets have steadily priced in higher interest rates for Switzerland, as well the SNB’s reluctance to intervene in the currency markets. At their June meeting, the SNB took a very aggressive policy step by hiking rates with 50bsp and removing their previous classification that the CHF is ‘highly valued’. Unlike other central banks, the SNB has chosen to try and tackle inflation before it runs rampant by hiking rates aggressively. Their hike in June was the first hike since 2007, and if the bank follows through with a hike in September it will mean Switzerland will have positive interest rates for the first time in 8 years. There is scope for further CHF upside in the months ahead with 4 supporting drivers. SNB’s hawkish tilt, the bank’s acceptance of a stronger CHF with less intervention, negative underlying risk sentiment driven by the global cyclical slowdown, rising inflation. The SNB did note that they are willing to be active in the foreign exchange market to ensure appropriate monetary conditions which means too much CHF strength could get the wrong attention from the bank. POSSIBLE BULLISH SURPRISES Any incoming data (especially inflation coming up early on Monday) or SNB comments that causes markets to price in even more aggressive policy from the bank could trigger bullish reactions in the CHF. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bullish reactions in the CHF. The more aggressive markets think the ECB will be with incoming hikes, the more aggressive they will be for the SNB. Thus, data that trigger hawkish ECB expectations could also be supportive for the CHF. POSSIBLE BEARISH SURPRISES The SNB has not been as active in trying to devalue the CHF through sight deposits as they have been in recent years. With the bank now on a hiking cycle, any drastic appreciation could spark some intervention and would be a bearish catalyst. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bearish reactions in the CHF. Further lower repricing of ECB hikes could trigger downside in the CHF, and the biggest dovish risk for the currency is a big surprise miss in CPI BIGGER PICTURE The SNB surprised with a 50bsp hike and signalled, that unlike other central banks, they will not get behind the curve. Apart from a hawkish central bank, we also have the economy on a steady footing, as well as less risk of intervention as SNB’s Jordan said they no longer see the CHF as highly valued (there is of course risk that they could intervene if the CHF appreciates too much too fast). This means that the bias for the CHF has changed to bullish and we’ll be looking for big dips in the CHF for buying opportunities
by thunderpips
CHF down in the long run?CHFJPY has broken the 4 hr structure downwards and if the current 4 hr candle closes above the zone , It might go to retest the Supply zone between 141 and 143 price level, which might be a good place to sell as the structure downwards has been broken and it might give us a big move.If it happens and it goes back up to retest those levels ,I will wait for the Confirmation on smaller time frames or BOS on smaller time frames.For any entry on the downside, We'll have to wait for confirmation.
Short
by shyApricot2597
EURCHF Buy opportunity on an RSI Double BottomThe EURCHF pair has been on a strong sell sequence since the June 09 High, which in fact was a Double Top with the May 10 High. The strength of the sell-off is similar to the Feb 07 - March 07 sequence. Interestingly enough, today's low makes an ideal Lower Low if the pattern in the making is a Channel Down. With the 1D RSI making a short-term Double Bottom, this is technically the ideal spot for a medium-term buy targeting the 1D MA50 (blue trend-line). If we close below the Lower Lows, be ready to limit the loss and gain exposure again on the dashed trend-line. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
Long
by TradingShot
USDCHF Bullish medium-term. 1D MA50 as the Resistance.The USDCHF pair has been wild on high volatility ever since the May 16 market top as within 45 days it has formed big swings of Highs and Lows within a newly developed Channel Down. At the moment the price is on a three day rebound on the Lower Lows trend-line of the Channel and more importantly the 1W MA200 (red trend-line), which is acting as a Support since the April 21 break-out. As you see the long-term trend is a Bullish Channel which on the May 16 High broke to the 1.236 Fibonacci extension. The 1W RSI since the start of that Channel suggests that we are on optimal (near the Higher Lows trend-line) long-term buy levels. A closing below the 1W MA200 could target the 1D MA200 (orange trend-line), as it has consistently over the past 12 months. At the moment a good strategy on the short-term could be to buy targeting the 1D MA50 (blue trend-line) and then wait for a pull-back. A 1D candle close above the 1D MA50 can be taken as a bullish break-out signal towards the Lower Highs (top) trend-line of the newly formed Channel Down. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
by TradingShot
2
USD CHF - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE Hawkish Fed policy remains a key driver for Dollar strength. With headline inflation >8%, the Fed has been pressured to tighten policy aggressively, hiking rates by 75bsp at their June meeting, and continuing with Quantitative Tightening. However, as a result of increasing fears of a growth slowdown (as evidenced by recent econ data), STIR markets have repriced lower, and now expects a terminal rate of 3.3% (versus >4% before the June FOMC meeting). As STIRs reprice lower, we are expecting that to act as a possible short-term negative driver for the USD. Even though lower STIRs should be negative for the USD, as a lot of hikes have been baked in, the growth concerns sparked further risk off concerns this past week, which supported the USD. The USD is usually inversely correlated to the global economy and trade, appreciating when growth & inflation slows and depreciates when growth & inflation accelerates (reflation). Further expectations of a cyclical slowdown and continued tight monetary policy expectations has seen investors shun risk assets and even bonds (usually considered a safe haven), and the USD has been a key benefactor of the rush to safety in recent weeks. Even though US bonds are considered safe havens, the current high inflation has seen a strong stock-to-bond correlation and has caused big bond outflows. With bonds not fulfilling its usual save haven role the USD has been the haven of choice. POSSIBLE BULLISH SURPRISES As aggressive Fed policy has been supporting the USD, any incoming data (this week’s ISM Services and NFP) that sparks further aggressive hike expectations, or additionally any comments from FOMC members that signals even more aggressive policy could trigger bullish reactions in the USD. As the cyclical outlook for the global economy is very bleak, and the USD is considered a safe haven, it means incoming data that exacerbates fears of recession and triggers a big rush to safety could trigger bullish USD reactions. Further outflows in US bonds means more USD safe haven appeal. So, watching key triggers for further upside in bond yields like rising commodity prices, rising inflation expectations and upside surprises in inflation data could also trigger further USD bullish reactions. POSSIBLE BEARISH SURPRISES Apart from this past week, the USD has reacted cyclically to incoming data which could suggest markets is shifting from safe haven focus to the rising risks of recession. The worse growth data gets, the higher likelihood of a ‘Fed Put’ in the months ahead. Thus, extremely bad ISM Services PMI or NFP data this week could trigger bearish reactions in the USD. Tactically the USD is trading at cycle highs, and aggregate CFTC positioning is close prior highs which acted as local tops for the USD. Thus, stretched positioning could make the USD vulnerable to mean reversion in the short-term. With a lot already priced for the Fed, it won’t take much for the Fed to disappoint markets on the dovish side. Any FOMC comments that suggests more concern about the economy than inflation could trigger bearish reactions in the USD BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays aggressive and cyclical concerns put pressure on risk assets. But we do want to be mindful that lots has been priced for the USD, and as growth deteriorates, we are expecting that the weigh on the USD if markets start pricing in a higher likelihood of a less hawkish Fed due to higher recession risks. The opposite side to that though is that further concerns about the economy sees more safe haven inflows into the Dollar. Positioning is stretched, so we would prefer much deeper pullbacks for new med-term USD longs and would look for short-term catalyst that offer shorter bearish sentiment trades against the current strong bull trend. CHF FUNDAMENTAL OUTLOOK: WEAK BULLISH BASELINE The CHF has been supported in recent months as STIR markets have steadily priced in higher interest rates for Switzerland, as well the SNB’s reluctance to intervene in the currency markets. At their June meeting, the SNB took a very aggressive policy step by hiking rates with 50bsp and removing their previous classification that the CHF is ‘highly valued’. Unlike other central banks, the SNB has chosen to try and tackle inflation before it runs rampant by hiking rates aggressively. Their hike in June was the first hike since 2007, and if the bank follows through with a hike in September it will mean Switzerland will have positive interest rates for the first time in 8 years. There is scope for further CHF upside in the months ahead with 4 supporting drivers. SNB’s hawkish tilt, the bank’s acceptance of a stronger CHF with less intervention, negative underlying risk sentiment driven by the global cyclical slowdown, rising inflation . The SNB did note that they are willing to be active in the foreign exchange market to ensure appropriate monetary conditions which means too much CHF strength could get the wrong attention from the bank. POSSIBLE BULLISH SURPRISES Any incoming data (especially inflation coming up early on Monday) or SNB comments that causes markets to price in even more aggressive policy from the bank could trigger bullish reactions in the CHF. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bullish reactions in the CHF. The more aggressive markets think the ECB will be with incoming hikes, the more aggressive they will be for the SNB. Thus, data that trigger hawkish ECB expectations could also be supportive for the CHF. POSSIBLE BEARISH SURPRISES The SNB has not been as active in trying to devalue the CHF through sight deposits as they have been in recent years. With the bank now on a hiking cycle, any drastic appreciation could spark some intervention and would be a bearish catalyst. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bearish reactions in the CHF. Further lower repricing of ECB hikes could trigger downside in the CHF, and the biggest dovish risk for the currency is a big surprise miss in CPI . BIGGER PICTURE The SNB surprised with a 50bsp hike and signalled, that unlike other central banks, they will not get behind the curve. Apart from a hawkish central bank , we also have the economy on a steady footing, as well as less risk of intervention as SNB’s Jordan said they no longer see the CHF as highly valued (there is of course risk that they could intervene if the CHF appreciates too much too fast). This means that the bias for the CHF has changed to bullish and we’ll be looking for big dips in the CHF for buying opportunities.
by thunderpips
2
USD CHF - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE Hawkish Fed policy remains a key driver for Dollar strength. With headline inflation >8%, the Fed has been pressured to tighten policy aggressively, hiking rates by 75bsp at their June meeting, and continuing with Quantitative Tightening. However, as a result of increasing fears of a growth slowdown (as evidenced by recent econ data), STIR markets have repriced lower, and now expects a terminal rate of 3.3% (versus >4% before the June FOMC meeting). As STIRs reprice lower, we are expecting that to act as a possible short-term negative driver for the USD. Even though lower STIRs should be negative for the USD, as a lot of hikes have been baked in, the growth concerns sparked further risk off concerns this past week, which supported the USD. The USD is usually inversely correlated to the global economy and trade, appreciating when growth & inflation slows and depreciates when growth & inflation accelerates (reflation). Further expectations of a cyclical slowdown and continued tight monetary policy expectations has seen investors shun risk assets and even bonds (usually considered a safe haven), and the USD has been a key benefactor of the rush to safety in recent weeks. Even though US bonds are considered safe havens, the current high inflation has seen a strong stock-to-bond correlation and has caused big bond outflows. With bonds not fulfilling its usual save haven role the USD has been the haven of choice. POSSIBLE BULLISH SURPRISES As aggressive Fed policy has been supporting the USD, any incoming data (this week’s ISM Services and NFP) that sparks further aggressive hike expectations, or additionally any comments from FOMC members that signals even more aggressive policy could trigger bullish reactions in the USD. As the cyclical outlook for the global economy is very bleak, and the USD is considered a safe haven, it means incoming data that exacerbates fears of recession and triggers a big rush to safety could trigger bullish USD reactions. Further outflows in US bonds means more USD safe haven appeal. So, watching key triggers for further upside in bond yields like rising commodity prices, rising inflation expectations and upside surprises in inflation data could also trigger further USD bullish reactions. POSSIBLE BEARISH SURPRISES Apart from this past week, the USD has reacted cyclically to incoming data which could suggest markets is shifting from safe haven focus to the rising risks of recession. The worse growth data gets, the higher likelihood of a ‘Fed Put’ in the months ahead. Thus, extremely bad ISM Services PMI or NFP data this week could trigger bearish reactions in the USD. Tactically the USD is trading at cycle highs, and aggregate CFTC positioning is close prior highs which acted as local tops for the USD. Thus, stretched positioning could make the USD vulnerable to mean reversion in the short-term. With a lot already priced for the Fed, it won’t take much for the Fed to disappoint markets on the dovish side. Any FOMC comments that suggests more concern about the economy than inflation could trigger bearish reactions in the USD BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays aggressive and cyclical concerns put pressure on risk assets. But we do want to be mindful that lots has been priced for the USD, and as growth deteriorates, we are expecting that the weigh on the USD if markets start pricing in a higher likelihood of a less hawkish Fed due to higher recession risks. The opposite side to that though is that further concerns about the economy sees more safe haven inflows into the Dollar. Positioning is stretched, so we would prefer much deeper pullbacks for new med-term USD longs and would look for short-term catalyst that offer shorter bearish sentiment trades against the current strong bull trend. CHF FUNDAMENTAL OUTLOOK: WEAK BULLISH BASELINE The CHF has been supported in recent months as STIR markets have steadily priced in higher interest rates for Switzerland, as well the SNB’s reluctance to intervene in the currency markets. At their June meeting, the SNB took a very aggressive policy step by hiking rates with 50bsp and removing their previous classification that the CHF is ‘highly valued’. Unlike other central banks, the SNB has chosen to try and tackle inflation before it runs rampant by hiking rates aggressively. Their hike in June was the first hike since 2007, and if the bank follows through with a hike in September it will mean Switzerland will have positive interest rates for the first time in 8 years. There is scope for further CHF upside in the months ahead with 4 supporting drivers. SNB’s hawkish tilt, the bank’s acceptance of a stronger CHF with less intervention, negative underlying risk sentiment driven by the global cyclical slowdown, rising inflation. The SNB did note that they are willing to be active in the foreign exchange market to ensure appropriate monetary conditions which means too much CHF strength could get the wrong attention from the bank. POSSIBLE BULLISH SURPRISES Any incoming data (especially inflation coming up early on Monday) or SNB comments that causes markets to price in even more aggressive policy from the bank could trigger bullish reactions in the CHF. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bullish reactions in the CHF. The more aggressive markets think the ECB will be with incoming hikes, the more aggressive they will be for the SNB. Thus, data that trigger hawkish ECB expectations could also be supportive for the CHF. POSSIBLE BEARISH SURPRISES The SNB has not been as active in trying to devalue the CHF through sight deposits as they have been in recent years. With the bank now on a hiking cycle, any drastic appreciation could spark some intervention and would be a bearish catalyst. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bearish reactions in the CHF. Further lower repricing of ECB hikes could trigger downside in the CHF, and the biggest dovish risk for the currency is a big surprise miss in CPI. BIGGER PICTURE The SNB surprised with a 50bsp hike and signalled, that unlike other central banks, they will not get behind the curve. Apart from a hawkish central bank, we also have the economy on a steady footing, as well as less risk of intervention as SNB’s Jordan said they no longer see the CHF as highly valued (there is of course risk that they could intervene if the CHF appreciates too much too fast). This means that the bias for the CHF has changed to bullish and we’ll be looking for big dips in the CHF for buying opportunities.
by thunderpips
EURCHF - Consolidation opportunityAfter a significant downtrend from 1.20 down to below 1.00, the EURCHF pair is now consolidating on the daily timeframe. Similarly, the Sentiment Index at the bottom is consolidating. Both these consolidations mean that the pressure is increasing and ultimately the pair will break either to the upside (trend reversal) or to the downside (trend continuation). The opportunity now is to trade the pair within the consolidation considering it's very large and clearly identifiable. Remember to stay patient and always look for confirmation from the indicators!
by a.b