USD/CHF Weekly Analysis 23 February 2017

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In the FOMC meeting minutes, the committee’s members argued that the labour market has continued to strengthening, while economic activity has continued to expand in a moderate pace as well. Although, inflation remains below the committee’s 2% target.

Regarding the monetary policy stance, the committee mentioned the following:

‘’The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will rise to 2 percent over the medium term. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data. ‘’

Quote from: https://www.federalreserve.gov/monetarypolicy/files/monetary20170201a1.pdf

The German economic growth report showed stability in the economic activity in the previous month, with GDP remaining stable at 0,4% on monthly basis and at 1.2% on yearly basis.

Later, we are expecting the announcements of Initial Jobless claims and the Crude oil inventories report.

 

CHARTING

The crucial points are:

1

In the previous weekly session, the USD/CHF had met strong support at 0.99600 level where it bounced off, ascending higher than 1.00700 level in Tuesday’s session, which is a sign that the bulls have become stronger. However, in yesterday’s session the price has been effected by the FOMC meeting minutes’ release, which is evident with the large upward spike in the session’s candle.

 Charting outcome: Neutral – Marginally Bullish 

INDICATORS (computerized T.A)

The crucial points are:

2

3

The indicators are signaling that a weak uptrend has occurred, which is possible to become stronger. The moving averages have kept the same slopes, while the spread between the positive and the negative dynamic has widened. The trend dynamic has increased by +11.27%, whilst the market’s volatility has marginally decreased by -1.42%. Finally, the oscillators have passed into overbought areas.

Indicators outcome: Marginally bullish – Bullish  

CONCLUSION

Indicators and charting are confirming that the market is possible to move in a positive path. However, the charting indicates the possibility of the neutral path as well. If the price appreciates higher than 1.01700 level, the next resistance is possible to occur at 1.02500 level. On the contrary, if the price breaks lower than 1.00700 level, the next possible support is at 0.99600 level.

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