(Ipek Ozkardeskaya – Swissquote Bank Ltd)
Monday blues kicked in following a $7 trillion rally since July, which was mainly fueled by the expectation that the recession rhetoric would convince the Federal Reserve (Fed) to stop raising the rates and even start thinking about cutting the rates. Now that the Jackson Hole meeting approaches, those bets are vanishing.
Yesterday’s equity selloff was escorted with a jump in the US 10-year yield to above 3%, and a rally in the US dollar. The dollar index hit the 109 level yet again, and the broad-based rally in greenback sent the major peers depressed. The EURUSD sank below parity and gold sank below the $1730 level.
In energy headlines, the Nordstream pipeline is again closed for maintenance for three days. The last time the pipeline was closed for maintenance, Russians restored the gas flow, but much less. The European nat gas prices continue soaring, and giving support to crude oil. Oil companies extend rally.
Daily technical and trading outlook – USD/CHF
Trend daily chart
21 HR EMA
55 HR EMA
Trend hourly chart
Easing from o/bot.
13 HR RSI
14 HR DMI
Resumption of recent upmove.
0.9800 – 61.8% retrace. fm 1.0064-0.9372.
0.9718 – 50% retrace. fm 1.0064-0.9372.
0.9658 – Mon’s 3-week high.
0.9605 – Mon’s European high (now sup).
0.9575 – Mon’s low.
0.9544 – Last Wed’s high (now sup).
USD/CHF – 0.9641.. The greenback continued its recent winning streak. Dlr found renewed buying at 0.9575 in Europe n rallied to a 3-week high at 0.9658 in NY on broad-based usd’s strength together with cross-selling in chf b4 retreat.
On the bigger picture, dlr’s impressive rise fm Jan’s near 6-year bottom at 0.8758 to 0.9472 on the 1st day of Apr due to rally in U.S. yields suggests erratic fall fm 1.0344 (2016 peak) to retrace LT rise fm 2015 record 0.7360 low has ended n despite subsequent 1-year long monthly sideways swings, dlr’s rally abv 0.9472 in Apr to a near 3-year peak of 1.0064 (May) indicates price would head twd 1.0128. Despite subsequent fall to 0.9372 in early Aug, dlr’s rally back to 0.9599 last week suggests low has been made n abv 0.9718 (50% r) would yield further headway twd 0.9886 in Sep. On the downside, only a daily close below 0.9450 signals recovery has ended instead n risks re-test of 0.9372.
Today, dlr’s rally fm Aug’s near 4-month trough at 0.9372 to 0.9658 signals MT downtrend fm 2022 peak at 1.0064 (May) has ended at 0.9372 n wud head twd 0.9718, however, o/bot condition on hourly indicators shud cap dlr below 0.9800 today n yield retreat later. A daily close below 0.9599 risks 0.9565/75.