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Swiss Inflation Cools

The Swiss Franc has weakened today on the back of the latest Swiss inflation numbers. CPI for last month was seen rising just 0.1%, down from 0.3% prior and below the 0.2% the market was looking for. On the back of the SNB hiking rates last month, the data serves as further evidence that inflation is moving in the right direction, pushing back against expectations for further SNB tightening. With hawkish Fed expectations more entrenched, USDCHF is rallying on Monday and looks likely to gain further if we see any strength in today’s US ISM manufacturing data.

Big Option Expiries Due

Also, worth noting that we have key options expiries in USDCHF this week which traders should consider. $1 billion is set to roll off today at .8840, $290 million at .9040 tomorrow, and $400 million at .9100 on Wednesday.  Despite the rally in USDCHF today, the pair is still down around 5% on the year with the current upward move looking like a corrective rally within the larger downtrend. With this in mind, the pair remains vulnerable to further downside until we see a structural shift.

Technical Views

USDCHF

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For now, the pair remains within the .8861 - .9096 range which has framed price action over the last two months. While still under the bearish trend line from earlier highs on the year, the focus is on a break of current support and a continuation lower. Bulls will need to see a break of the .9099 highs and the bear trend line in order to shift this view. 

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