The USD/CHF pair is little changed today as the market reflects on the recovering Swiss economy and the relatively weaker US dollar. It is trading at 0.9133, which is 0.60% above last week’s low of 0.9080.
What happened: The top catalyst for the USD/CHF pair today is the Swiss and US manufacturing PMI data. According to Procure.ch, the Swiss manufacturing sector continued doing well in April as global demand rose. The PMI rose from 66.3 in March to 69.5 in April this year.
This was a better performance than the median estimate of 66.0. The performance was also better than that of other European countries like Germany, Norway, and the Eurozone, whose PMI was at 66.2, 59.1, and 62.9, respectively. Later today, Markit and the Institute of Supply Management (ISM) will publish the latest US PMI data. The USD/CHF pair will also react to the performance of the US Treasury yields.
The four-hour chart shows that the USD/CHF pair has been in a tight range recently. It has remained between the 25-day and 50-day exponential moving averages (EMA). Also, the pair has moved slightly above the upper side of the descending channel.
In addition, the pair’s volume has started to fade, signaling that this may not be a bullish breakout after all. Therefore, we can’t rule out a continuation of the previous downward trend as the market attempts to test the important support at 0.9085.
Meanwhile, on the daily chart, we see that the pair has been in a strong downward trend. The channel mentioned above is also still visible. Notably, the 25-day and 50-day EMAs have formed a bearish crossover. Therefore, as noted above, there is a possibility that this bearish trend will continue.